and one in the United States following a disagreement with a key business ally, The Royal Gazette can reveal.

OEBusiness, which provides payment solutions and services to e-businesses, is threatening legal action against the unnamed participant for hampering its operations.

The company said it had tried to get the firm to reverse its decisions, but its refusal to do so means OEBusiness cannot implement its original business plan.

OEBusiness refused last night to reveal the identity of the participant.

Last year, it announced it had set up a major alliance with the Bank of Bermuda in which the Bank became a shareholder.

OEBusiness has a number of other alliances, including with California-based VeriSign Inc., a leading provider of Internet trust services, and it has entered into agreements with Planet Payment, and Canadian company PSiGate.

The Royal Gazette contacted the Bank of Bermuda last night, but a spokeswoman was unable to contact senior executives for comment.

In a statement to The Royal Gazette yesterday, OEBusiness said it had to restructure its domestic and international business operations because of "certain decisions taken by one of its key participants, which have significantly impaired the ability of OEBusiness.com to continue business in accordance with its original business strategy''.

The five lay-offs come hard on the heels of redundancies announced two weeks ago by another Island e-payment company, Promisant.

Promisant made 11 staff in Bermuda and 13 in Europe, Latin America and North America redundant in reaction to turbulent market conditions.

Promisant, which a year ago was promising to be making at least $4 billion within three years, was set last year by the Bank of Butterfield and Bermuda-based e-commerce provider Coral Capital Ltd.

The company said it was moving away from a traditional direct sales strategy to industry-specific partnerships to gain added leverage.

OEBusiness chief executive officer Colin Wood said last night: "We are very disappointed to announce this restructuring given the success of the business since it began operations last year.

"While we have made every possible attempt to reverse the decisions taken by this participant, we now find ourselves in a position where we have no choice other than to take actions which include the restructuring of our business operations resulting in four Bermuda employees and one US employee being made redundant.'' The company, which now has five remaining staff in Bermuda and the US, said the four Island employees laid off had found new jobs.

Hinting that OEBusiness is considering suing the unnamed ally, the statement continued: "Given the nature of the issues and consequences to OEBusiness.com that arise as a result of these decisions, on advice from our legal advisors, we are not in a position to make any further comments at this time concerning the identity of the participant and our intended course of action to obtain consequential relief.''