It is pursuing BT and nine other defendants: Global Crossing, Cable & Wireless, Alcatel, Level 3, Tyco, Flag, NTL, Viatel and the UK Cable Protection Committee (UKCPC).

The case comes after a failed attempt by Cityhook to force the Office of Fair Trading (OFT) to act on an alleged cartel in the telecoms market.

After a four-year initial investigation, the OFT said that there was a case to answer but provisionally dropped the case in February, saying that there had been no “hard-core infringement”.

Cityhook, which has been unable to trade since 2000, claimed that it was boycotted by the UKCPC, whose members included BT, in a move designed to prevent it from opening up the cable market.

Cityhook plans targeted a global core business worth £630 million by 2009.

The case, on which BT said that it had no comment “at this stage”, is the latest in a series of legal woes that it faces.

It is awaiting a verdict from the European Commission on whether state backing for part of its pension scheme constitutes state aid. It is also awaiting the outcome of a competition investigation by Ofcom into the pricing of its high-speed internet access. Ofcom is looking into whether the group abused a dominant position in its pricing of its household broadband products.

The Office of Fair Trading spent £1.5 million investigating the Cityhook complaint and dropped it just weeks after the watchdog’s chief vowed to get tough on anti-competitive practice. It said that the inquiry no longer constituted an administrative priority.

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