SAP, the German software giant, has admitted that one of its divisions made "some inappropriate downloads", as it responded to a lawsuit filed by Oracle, a US competitor, alleging corporate theft.

Oracle has accused SAP of "corporate theft on a grand scale" — blunt language that analysts say underscores the increasingly cutthroat battle between the rivals.

Oracle has claimed that SAP trespassed on its computers to obtain secret product information so that it would have a better chance to reel in new customers.

However, SAP denied that it had accessed Oracle's intellectual property.

In its formal response, SAP acknowledged that "some inappropriate downloads of fixes and support documents occurred at TomorrowNow", a customer support subsidiary, but maintained that data remained within TomorrowNow and was not exploited by SAP.

"Importantly, SAP affirmed that what was downloaded at TomorrowNow stayed in that subsidiary's separate systems," the company said, adding: "SAP did not have access to Oracle intellectual property.”

Henning Kagermann, the chief executive of SAP, said: "Even a single inappropriate download is unacceptable. We regret very much that this occurred."

He added that his company believes that Oracle "wasn't significantly harmed" by the actions and that SAP was keeping all “options open” in regard to settling the case.

Geoff Howard, a lawyer for Oracle, said that "SAP has now admitted to the repeated and illegal downloading of Oracle's intellectual property".

SAP has long been the market leader in business applications software, which helps companies, schools and government agencies to manage their payrolls, vendor relationships and various other administrative tasks.

Although it still makes more of its money from database software, Oracle has emerged as a more formidable threat in the business applications market by buying many of the industry's other players.

Oracle, which is based in California, has spent more than $25 billion (£12.5 billion) since its shopping spree began in early 2005 with its acquisition of PeopleSoft.

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