The UK's two largest internet companies are threatening to sue BT over holding up access to high speed internet services.

AOL Europe, part of media group AOL-Time Warner and Freeserve, owned by France Télécom's Wanadoo, say BT has given its own internet arm 10 times more high speed capacity than they have been allowed.

The companies have called on regulator Oftel to intervene. If that fails, they have instructed lawyers to take court action.

BT is allowing its service provider, Openworld, to sign up 2,000 customers per week while AOL and Freeserve are restricted to 200 customers each.

A spokesman for AOL Europe said that it was only this week that it had discovered the extent of the disparity between access granted to Openworld and other providers. The dispute is over digital subscriber lines, a technology that lets customers access the internet up to 10 times faster than a standard phone line.

Under the terms of its licence BT must offer other operators wholesale access to the service. "This is a blatant and unlawful abuse of BT's market position," said a spokesman for AOL. "If Oftel and BT don't respond to calls for transparency, we will take legal action." Oftel confirmed that it received a complaint from the two companies in December and is investigating the charges. BT called the threats "sabre-rattling".

"This French-owned company and American-owned company are saying 'yah boo, it's not fair'," said a spokesman. "Yes, BT is serving more customers than they are, but this is not because of unfairness. Some of our competitors are trying to find excuses for [their] competitive difficulties."