The US government yesterday sued MasterCard and Visa, the world's largest credit card networks, accusing their owners of illegally blocking competition in the industry for more than 20 years.

Antitrust officials at the justice department said they would seek to restructure the ownership and control of Visa and MasterCard, in an attempt to introduce competition between the two networks.

The networks, jointly owned by the same member banks, are estimated to control 75 per cent of credit and charge card transactions in the US.

The long-awaited lawsuit - expected to take a year to prepare for trial - represents a substantial boost for American Express and Discover, which have led the challenge against the two industry leaders.

Visa and MasterCard maintain the power to stop their member banks from distributing rival cards in the US, but such restrictions are banned in the European Union and Latin America.

The government action is certain to be contested fiercely by Visa and MasterCard.

Visa USA, the larger of the two, said: "Consumers have unlimited choices when it comes to credit cards. No business should be required to offer its competitors' products, particularly when there is free and open access to those products elsewhere."

It pointed out that most cards were now sold via direct marketing rather than through banks, and cited figures from Mr Alan Greenspan, chairman of the Federal Reserve, who stated that eight out of 10 credit cards held by Americans come from a financial institution that is not their regular bank.

However, Ms Janet Reno, attorney general, attacked both networks yesterday for stifling innovation in the industry. "America's consumers have lost out," she said. "Competitive initiatives that could benefit consumers have been abandoned, delayed or suppressed."