Government is set to climb into the ring to fight a massive $100 million dollar lawsuit filed by one-time monopoly phone firm Cable & Wireless.

Telecommunications Minister E.T. (Bob) Richards said: "We think this writ is without any kind of foundation and we will be vigorously opposing it.'' The legal move, reported in Saturday's Royal Gazette , fulfills Cable & Wireless' pledge to go to war over the end of its monopoly on the Island's overseas network.

It comes, however, only days after the firm and Government declared a truce in a war of words fought out with a series of adverts in the media.

Sen. Richards confirmed yesterday that talks with Cable & Wireless were still going on in a bid to resolve differences over the introduction of TeleBermuda International to the market.

And he admitted he was disappointed that Cable & Wireless had chosen to lodge their writ now.

But he said: "I've given up trying to account for their actions.

"Meantime, we're still in talks with them and hopefully we will get some kind of resolution.'' Sen. Richards added: "Even if the talks don't move forward -- and I hope they will -- I'm confident we will prevail.

"I'm sure the legal system will see we're on the right side of this thing.'' Phone wars broke out last month after Cable & Wireless ran a series of tough-talking adverts putting their case.

The firm claimed Government had tied its hands by not allowing it to cut rates and compete with TeleBermuda.

And insiders said the company was preparing to shed up to a quarter of its workforce -- 25 of 115 staff -- amid a shrinking market share after TeleBermuda went on line.

But Sen. Richards countered that Cable & Wireless were to blame for not submitting the legally-required financial information to back its rate cuts bid.

He also accused the firm of using its employees as political pawns in a tussle with Government.

And he added that telecommunications deregulation in countries like the UK and US had included a grace period to prevent predatory pricing by the established player.

Sen. Richards also promised an hard-hitting advertising campaign by Government to counter what he called a "misleading'' campaign by Cable & Wireless.

But the two sides buried the hatchet the day after the first Government advert -- a warning triangle inscribed "Monopoly -- Dead End Road'' -- appeared in The Royal Gazette .

The advert added: "Sorry, Cable & Wireless, but it was time to pave another road for the future.'' Government promised to halt its advertising And Cable & Wireless agreed to moderate its advertising campaign while meetings with Sen. Richards went on.

GOVERNMENT GVT