It is a struggle born of the modern age, but its roots have a familiar ring. Money, power and territory are all part of the mix as the country's biggest bookmakers attempt to repel the online betting exchanges that are invading their market. And such is the vigour with which the two sides defend their rival philosophies on the business of betting some might argue that there is a hint of religion, too.

How different the prospects seemed for the bookies barely three years ago. In March 2001, Gordon Brown announced the imminent abolition of betting tax. Turnover would inevitably soar and they had the experience, branding and infrastructure to exploit it ruthlessly. The future belonged to them. As for Betfair, the internet betting exchange that had launched just nine months earlier, well, that was for nerds.

Within months, though, it became clear that Betfair - and the smaller exchanges that have now followed its lead - was not just a new, relatively minor competitor, but the standard-bearer for a deeply infectious way of betting.

By August 2002, Chris Bell, the chief executive of Ladbrokes, was ready not only to acknowledge the enemy, but engage it. "The layer who goes on a betting exchange to take £100,000 out of a certain horse," he told the Racing Post, "should be required to have a betting permit."

It was one of the earliest salvoes in a battle for minds - and wallets - that reached a new intensity last week, when Bell told The Money Programme, to be broadcast on BBC2 tomorrow night, that he believes "one race per day in British racing to be fixed".

It is an extraordinary allegation, not least because Bell is a highly intelligent and experienced operator who must be well aware of its incendiary nature. Here is a man, after all, who is paid to safeguard his shareholders' interests. Yet at the same time he is telling Ladbrokes' customers that they are being ripped off at least once a day.

Ratneresque, some said, but Bell is much too smart for that. Rather, it suggests that one of the Grade A minds in British bookmaking believes the exchanges - and Betfair in particular - are threatening the bookies' future power far sooner than anyone, the exchanges included, could have expected.

The bookmakers' strategy is clear: attack now while they still have the chance, and an opponent that can only grow stronger is still relatively weak and inexperienced. The long-promised Gambling Bill, if and when it reaches Parliament, could be their last chance for a generation to halt the rise of the exchanges. If the bookies can persuade the government to include plans to licence - and tax - Betfair's big-time layers, the effect on the all-important liquidity in its markets could be significant.

They have some powerful allies. Once, a strong pro-bookmaker lobby in the Commons was arranged against other MPs, often from constituencies with a strong racing tradition, who took the side of the racing authorities. Now, with racing's funding dependent on bookmakers' turnover rather than their profit, the two have effectively joined sides.

On the face of it, the vested interests of the bookmaking business are in a powerful position. The upstart exchanges have far fewer resources, far less political clout. Yet the simple fact that a figure such as Bell is prepared to impugn the integrity of his company's core business to score points against the exchanges is a clear sign that the early skirmishes have got the bookies on the run.

It is a sign, too, that the struggle is getting ugly and both camps are digging in, with racing, to some extent, stranded in between and taking shots from both sides.

The stakes are immense. The ideological struggle to be played out in Whitehall and Westminster could determine the balance of power in betting for years to come. No wonder the phoney war is over, and the real dirt has started to fly.