Gavin O'Reilly delivered his message with brio: Denis O'Brien now has a major fight on his hands. Arthur Beesley, Senior Business Correspondent, reports.

SIR ANTHONY O'Reilly was not present in the Shelbourne Hotel when his son Gavin launched a withering attack on his rival Denis O'Brien, but there is no doubt that the extraordinary tirade had his imprimatur.

As O'Brien buys up shares in Independent News & Media (INM) in a forceful challenge to Sir Anthony's grip on the organisation, the phoney war phase of the struggle now appears to be at an end. After lengthy skirmishing in which O'Brien lobbed volley after volley at the company, O'Reilly's remarks yesterday signal that the fightback has begun in earnest.

"O'Brien has sat there, he's run around the place throwing hand grenades, and hid behind his PR people and the press has been uncritical in its questioning of Mr O'Brien," O'Reilly said.

The preamble for this attack was a stock exchange statement that INM issued early in the morning not long after the release of its annual results.

INM declared O'Brien a "dissident shareholder" in that notice, questioned the motives behind his attacks on the firm and accused him of trying to destabilise it. While Gavin O'Reilly himself has described O'Brien in such terms before, such a statement from the board of INM amounts to a declaration to other shareholders that it will no longer stand by as O'Brien continues his campaign.

The notice has no legal force per se, but it provided a platform for O'Reilly to take swipes at O'Brien. This he did with brio; reading aloud the entirety of the stock exchange notice to the company's results press conference before inviting questions.

"Having taken appropriate advice, the board of INM believes that Mr O'Brien's comments and actions regarding INM, its board, its management, strategy and its governance, are designed to destabilise the company and run counter to the principles of a fair and orderly market for INM shareholders," O'Reilly read from the statement.

The notice cites a letter in 2003 from O'Brien to Gavin O'Reilly in which O'Brien said INM had "spent the last seven years trying to destroy my reputation" and said he was "waiting for the appropriate time to rectify the damage".

"In the light of this," read O'Reilly, "we believe it is reasonable to question Mr O'Brien's emotive reaction to the legitimate news coverage he has received in various Irish INM titles, presumably in relation to the Moriarty tribunal. This tribunal is investigating whether any corruption occurred in the awarding of a mobile phone licence to Mr O'Brien's company."

O'Brien's spokesman declined to specifically comment on that. However, O'Brien himself said in a statement that the remarks in general amounted to "a highly personal and unwarranted attack on the company's largest independent shareholder and appears to be designed to deflect attention away from the company's disappointing stock performance".

As O'Reilly took questions, a page titled "Some Questions for Mr Denis O'Brien" was circulated to journalists by one of at least six PR and investor relations advisers present at the event. There were 18 questions in all, some of which questioned his management credentials and the losses incurred by his radio company. Another asked whether O'Brien's Caribbean mobile phone company Digicel was worth about $1 billion less than its outstanding debt.

As O'Reilly said the purpose of the statement was to say to shareholders that "enough is enough", he said the most fundamental questions centred on why O'Brien was trying to undermine the company. "Why is he talking down Independent News & Media and issuing misleading and inaccurate comments and by extension I suppose you could say talking down the share price at the same time he is buying shares," he asked.

"And how is it possible that his views are so significantly at variance with every broker covering finance stocks? Does Mr O'Brien, I mean, is he the expert or are [ the] trained sophisticated professional brokerage houses, all who have very, very clear opinions of INM that are completely at variance to the myths, the innuendo, the misleading information that Mr O'Brien is issuing?"

INM will not allow O'Brien to propagate "lies and innuendo", he said. "It'll be very interesting to see how Mr O'Brien responds to this. That's up to you, whether indeed any of you are interested to put the questions, the hard questions to Mr Denis O'Brien which have been sorely lacking in the Irish media for the last nine months, sorely lacking, because it's a story that everybody loves. If you ask the hard questions, you might just kill the story."

O'Reilly said he was sorry that O'Brien had a "persecution complex" about his coverage in INM's newspapers. "But this group has been built on, and has ensured that this has always been the case, editorial independence. I don't sit and write the stories."

Other INM shareholders did not share O'Brien's concerns and had not expressed concern about the issues he had raised, O'Reilly said. "I think bewilderment is probably the position of most of the investors. They're asking us what is this guy O'Brien up to."

Equally bewildered were British journalists contacted in person by O'Brien, he maintained. "I certainly know he's been speaking to UK journalists. They've been receiving calls from Denis O'Brien and they're calling me up afterwards and saying who is this guy Denis O'Brien, why is he calling me up out of the blue to talk about Independent News & Media. So this guy is out there spinning and he's causing damage to the company's reputation and to all our shareholders. We're not going to allow that to continue."

O'Reilly declined to say what his assessment was of O'Brien's ultimate intentions and had no comment when asked about INM's defence strategy. Neither did he hold out the possibility of any settlement to the struggle.

"This company has nothing to back down from. We've just delivered record results. We have a very, very clear vision for the future. We have supported shareholders. I don't know, this is a battle, this is a war of Mr O'Brien's choosing, not of ours. As far as we're concerned we're going to continue to run our business to the best of our ability, evidenced by the results that we've just produced."

"After lengthy skirmishing in which O'Brien lobbed volley after volley at the company, O'Reilly's remarks yesterday signal that the fightback has begun in earnest"INM declared O'Brien a 'dissident shareholder', questioned the motives behind his attacks on the firm and accused him of trying to destabilise it