NewMedia Spark is understood to be considering legal action against the Italian entrepreneur who yesterday threatened to derail the internet investment vehicle's acquisition of new economy holding company GlobalNet Financial.

NewMedia Spark alleges that Italian software group AISoftware, run by Francesco Gardin, breached a promise not to become involved in a public takeover battle.

NewMedia Spark was last night forced to increase its offer for GlobalNet to $11.25m (£7.79m) in cash from $9m in order to match a competing offer from AISoftware made late last week.

GlobalNet's board had threatened to call off its agreed merger with NewMedia Spark in order to accept a higher offer from AISoftware.

NewMedia Spark, which owns 14% of GlobalNet, made its original agreed offer in June. That sparked interest from AISoftware, which holds 13% of GlobalNet.

NewMedia Spark reached an agreement with AISoftware to allow the Italian firm to make just one approach to GlobalNet. If unsuccessful, AISoftware agreed to support the NewMedia Spark deal.

The Italian company made an all-share offer for GlobalNet which was rejected because it was too complex and GlobalNet would have run out of cash before completion. But rather than retire, AISoftware went public and returned with an increased cash bid.

NewMedia Spark's lawyers believe they have a strong case for demanding that AISoftware compensate the company for the cost of increasing its offer.

Last night NewMedia Spark said it had received support for the deal from shareholders representing 41% of the company and that it would hold AISoftware to its promise.

Privately, senior manage ment at NewMedia Spark admit that the only reason they have not walked away from the deal is the stake that GlobalNet has in EO, the London-listed financial portal. NewMedia Spark has a 20% stake in EO, while GlobalNet has about 24%.

EO was set up last year, offering retail investors a chance to take part in the flotation of hi-tech companies through a web portal. Since the dot.com crash, however, it has repositioned its business and now acts as an intermediary between small brokerages and large investment banks.

It is one of a number of stakes in new economy firms held by Globalnet, which which was forced to sell or close its operating businesses earlier this year. GlobalNet also holds a 49% stake in share trading platform Stock Academy and just under 30% of financial software group Synaptic. GlobalNet had originally been involved in the supply of online financial news.