The Irish Pharmaceutical Union will go to the High Court next week in an attempt to block deregulation of the retail chemist industry. In a head-on clash with the Government, the union claims the decision to revoke regulations on State medicine contracts was "high-handed" and "catastrophic" for the industry.

It will seek a judicial review of the Government's decision, which removes limits on the number of contracts available to pharmacists. The union's president, Ms Marie Hogan, said the Minister for Health and Children, Mr Martin, had broken an agreement on regulations reached in 1996.

She said: "We have done our share of that agreement and the State hasn't. We had an agreement and they have broken that agreement."

Ms Hogan added: "We will seek a declaration that the Minister was incorrect and in breach of the law and otherwise not entitled to revoke the regulation as he did."

When revoking the regulation last week, the Government said the Attorney General, Mr Michael McDowell SC, had found it ultra vires.

The move was welcomed by the Competition Authority, which has long argued that the regulation meant there was little or no competition in the industry. According to this argument, there is no pressure to reduce prices, so they remain high.

While there is no limit on the number of pharmacies, State contracts are a crucial revenue-driver for chemist outlets. The business is not viable without such contracts.

The union's argument is that deregulation will see customers drift to supermarkets and city outlets, leaving the business in small towns and villages to fade away.

The union held a mass meeting last night in west Dublin for its members, who regard themselves as being in dispute with Mr Martin. Asked whether members would refuse to sell medicine under Government contracts, the union's general secretary Mr Séamus Feely said such action would be considered "appropriate" only if other attempts to reinstate the regulation failed.

He noted, however, that the union's executive had mandated its management to take whatever action was necessary.

When it was suggested that all market entrants should be entitled to State contracts, Mr Feely said: "Fair enough, but you have to look at the quality of services."

The union had agreed to meet Mr Martin, Mr Feely said, and the union hoped an appointment could be made soon.