A company has issued a writ against Yorkshire Water in an escalation of a dispute over charge increases following last year's price review.
A group of about 30 textile companies has been threatening to withhold payments to Yorkshire Water, arguing that the higher bills are likely to result in big job losses.
Now Woolcombers and Jarmain has issued a counter-writ for damages against the water company, arguing that price rises over the past four years have been excessive.
Yorkshire Water had already issued a writ for payment of a £100,000 bill for services and effluent treatment. Yorkshire said Woolcombers had not paid its bill since last November.
In a statement issued by the solicitors Brooke North & Goodwin, Woolcombers said: "The increases which have been imposed are alleged to constitute an abuse of the dominant position occupied by Yorkshire Water Services as the only provider of trade effluent treatment services in the area. The increases affect the ability of Woolcombers and Jarmain to export into Europe."
Yorkshire Water blames the textile firms for some of the worst pollution in the area, but price rises to deal with the clean-up have caused bitter opposition.