Global telecommunications giant Cable & Wireless is pressuring the Government into outlawing cheap telephone calls, a rival company has claimed.

The conflict between local Internet service provider Logic Communications and the Government appears to be barrelling toward yet another protracted legal wrangle.

After 18 months of meetings with Telecommunications Ministry officials, Logic launched a super cheap overseas telephone call service on July 23 in which subscribers used their telephone to make calls via the Internet.

It was cut off after 10 days when the Government threatened to press criminal charges against Logic for breaching its license.

As sniping between Telecommunications Minister Renee Webb and Logic Communications -- BTC's sister company -- has intensified over the past few weeks, a Supreme Court showdown is likely, it is understood.

In Atlanta on business yesterday, Logic president Peter Durhager insisted to The Royal Gazette that his team of lawyers were confident of proving the now-outlawed long distance service fell inside the bounds of the law.

And the company is prepared to fight what Mr. Durhager describes as "the lobbying power of Cable & Wireless'' which he insists is pressuring the Government into holding back technology in order to keep prices high.

"If you cut through all the technical mumbo-jumbo and the reasons the Government is saying this can't be done, the prices for the consumer are still way above what they need to be,'' he said.

"Several years into the move to a competitive market the impact of competition is still in effect zero for consumers.

"If the Government of Bermuda wants, as it has said, an open market, and consumers want the benefit of the competitive market, and Logic want to compete in an open market, who doesn't want it? "The only people who don't benefit from this is C&W and TeleBermuda, and it seems they have very strong lobbying power.

"They can threaten to pull out of Bermuda and that is probably what they are threatening. C&W know how to play this game, probably better than anyone.'' But he also said he did not want to pit his company against Minister Webb.

"I just want the Government to have the courage to step out and face the issues because all the players, including carriers and regulatory authorities, have failed to deal with this for the 18 months it's been on the burner.

"The Minister said definitively she would issue a policy statement on this by April but we're still waiting. Why can't she give us a timeframe?'' Earlier this week Ms Webb told The Royal Gazette that Logic's license allowed the company to provide data and not voice services.

She said the Government was trying to keep a "level playing field'' and allowing Logic into the long-distance market would be unfair on carriers C&W and TeleBermuda who were not allowed into Logic's Internet market.

Ms Webb pointed out that Logic's sister company BTC would then have an opening into the long-distance market while C&W and TBI were prohibited from entering the local call market.

But yesterday Mr. Durhager hit back: "As vigorously as the Minister says our license does not allow us to offer this, we feel it does.'' Contrary to what the Minister said, C&W was indeed allowed to buy into the local call market through failed carrier Quantum, of which it held around 35 percent equity, he said.

And it advertises in the Yellow Pages as providing "Internet services''.

"The Minister is trying to paint this picture for the public that there's a whole bunch of complex technical, legal and regulatory issues that have to be sorted out before this service is available,'' Mr. Durhager said.

"That is just not the case. She can OK it with the stroke of a pen. There is absolutely no reason the public should not be getting much cheaper calls right now. We have the technology and the will.

"The average person in the street can shave around $1,000 a year off their yearly telephone bill and that's a meaningful reduction.''