A row has broken out among pay TV companies after Canal+ alleged in a lawsuit that rival NDS arranged for the posting of information on how to crack the encryption used in its digital TV smartcards on a pirate Web site.

Canal+ alleges that NDS Group, which is majority owned by Rupert Murdoch's News Corporation, deliberately broke and distributed its set-top smart-card code. It claims losses of $1 billion since 1999, when the information was first posted on DR7.com, arise from a well-funded research effort by NDS into how to crack Canal+ codes.

NDS has angrily dismissed the allegation that it has ever promoted TV piracy, branding the lawuit filed against it by Canal+ "outrageous and baseless". It said that it intends to file countersuit against Canal+.

"The problem is due solely to the inferior nature of Canal Plus' conditional access technology, the failure of its business plan to contain measures to protect against piracy and its failure to deal with piracy once it began," said Abe Peled, chief executive officer of NDS, in a statement.

"The clear evidence is that the pirate community targeted Canal+ early in 1998 and succeeded without the help of anyone, particularly NDS," he added. ®