Mishcon de Reya, the law firm, and its star solicitor Anthony Julius have become embroiled in a High Court dispute involving an allegation of professional impropriety, it emerged today.

The eminent London firm and Mr Julius - who has represented Princess Diana and Heather Mills - are at the centre of a dispute over whether Mishcon should be allowed to act in a forthcoming employment case.

The employment matter, which is in preparation but has yet to be filed, concerns a disagreement between the Jewish National Fund (JNF), a charity advised by Mishcon, and Simon Winters, its former chief executive.

Mr Winters, who ran the JNF for 12 years, is planning to sue the charity and has applied for an injunction to prevent Mishcon from helping JNF defend the claim.

He claims that Mishcon should be barred from acting in the case because there would be a professional conflict of interest since the firm has previously acted for him as an individual in a libel matter.

Professional rules generally prevent lawyers from acting for a client if they have previously worked for another party that might give them an unfair advantage.

Although Mr Winters’ libel allegations never reached court, his lawyers said that during the process of deciding whether to proceed with a libel case, Mr Winters gave Mr Julius confidential personal information.

This information, Mr Winters’ lawyers told the High Court, is relevant to the forthcoming employment dispute and there is a “clear risk it could be misused” if Mishcon is allowed to act for the JNF.

Mishcon denies there is a conflict of interest and is expected to argue that any advice Mr Julius gave Mr Winters was in his capacity as chief executive of the JNF, an established Mishcon client.

But a lawyer for Mr Winters told the court today that although Mishcon was already representing the JNF at the time, the advice Mr Julius gave to Mr Winters on the libel matter was to “him alone” as a private individual - and not as chief executive of the charity.

The court was told that Mr Julius discussed fee arrangements with Mr Winters and was in constant contact with him around the time of the proposed libel proceedings.

In addition, Mr Julius “more or less dictated” and then amended a draft version of a private letter that Mr Winters sent to the individuals he accused of libelling him, in what his lawyers said “couldn’t be a clearer indication that he was acting for Mr Winters”.

A spokesman for Mishcon said: “The JNF has asked us to fight this case. We do not believe there is a conflict of interest.”

The hearing continues.

A lawyer for Mr Winters said a complaint had been made to the Legal Complaints Service, an independent body that investigates allegations of misconduct in the profession.

Mr Winters’ lawyer declined further comment.

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