control of Czech television, in which the stakes are huge.

On one side is American billionaire Ronald Lauder, on the other Vladimir Zelezny, a Czech entrepreneur who says he, not Lauder, owns the country's most lucrative TV operation.

The business dispute has become an affair of State, with the issue a topic of discussion between Foreign Minister Jan Kavan and US Secretary of State Madeleine Albright.

Americans investors led by Mr. Lauder view Mr. Zelezny's attempt to claim TV Nova as highway robbery, an example of the roughneck methods common in former Soviet bloc countries adapting to the free market.

Mr. Zelezny's backers reportedly see him as a Robin Hood fighting rapacious American capitalists.

"We've created a monster and now we have to deal with it,'' said Fred Klinkhammer, head of the company that used to run TV Nova under Mr. Lauder.

Mr. Zelezny is of the opinion that "I have built this television (station) and I am not going to give it away.'' Mr. Zelezny was fired as executive director of TV Nova last April 19. In what amounted to a coup, he swung most of the station's famous faces his way, found a group of willing local investors, moved the station overnight and started makeshift broadcasting from the vacant Barrandov film studios in August.

Mr. Klinkhammer broadcast his version of Nova on the Internet for a couple of weeks but soon had to fold.

Mr. Lauder's group has filed two lawsuits, one seeking $300 million in damages from Mr. Zelezny, the other asking for $500 million from the Czech government for breach of the country's investment protection treaty.

The origins of the dispute go back to 1993. It was three years after the end of communist rule, and the Czech Republic was suffused with optimism as it headed into the era of democracy and the free market.

Mr. Zelezny and five other Czech intellectuals who played a role in communism's overthrow were awarded a 12-year broadcasting license on the basis of a project envisaging Czech-made television programmes.

By law, only Czech citizens could be granted the license, but the US investment group led by Mr. Lauder was in the background, providing financial backing for Zelezny's station.

TV Nova's focus quickly changed, reflecting the general mood of transformation from idealism to hard-nosed capitalism. Czech-made programs were quickly replaced by Dallas , Baywatch and other shows that drew viewers and advertisers.

Using a loan from Mr. Lauder's Bermuda company, Mr. Zelezny bought out his friends and went on to build a dominant TV station that takes in about 75 percent of television ad revenues in the Czech market. The company will earn an estimated $60 million by early this year.

But when Mr. Lauder's television projects in Poland, Romania and elsewhere in the former Soviet bloc ended up deeply in the red, he decided to sell Nova to another American media concern for $615 million.

Mr. Zelezny, the majority owner of the Czech company that holds Nova's license, blocked the deal and the Americans charged breach of contract.