De Beers, the diamond company is demanding £8.7m compensation from Atos Origin in a major contract dispute.

The diamond company is alleging delays and cost overruns in the project, which Atos denies.

De Beers initially signed a £2.6 million contract with Atos for upgraded IT systems in London operations as part of a plan to move work from Botswana to London. The contract value was increased to £3 million in February 2008, according to court documents seen by tabloid newspaper the Daily Mail.

The writ alleges that De Beers became concerned about progress and slippages in the timetable for delivery of software. De Beers also claims that Atos pulled out of the project four months later, after demanding more than £4 million extra.

De Beers contends that Atos suspended all work unless the mining firm agreed to pay an extra £4.6m and waive all claims against its supplier and also to agree to postpone final delivery of the system until mid December 2008.

The diamond giant has responded with a writ for £8.7 milllion to cover the cost of a replacement system, development costs, management costs, staff costs, and other expenses.

Atos, however, promises to defend the action. Court documents show Ursula Morgenstern, a senior vice president at Atos stating the delays and cost overruns were not caused her organisation’s failings but because the project's scope had increased significantly.