Sorrell and sacked Italian chief in fresh feud

The feud between Sir Martin Sorrell's WPP and the sacked head of the advertising giant's Italian arm is set to heat up, as the pair battle over control of a subsidiary company.

FullSix, a Milan-listed marketing firm in which both WPP and Marco Benatti have substantial stakes, agreed an €85m (£58m) takeover bid from Mr Benatti yesterday.

The agreement comes despite a growing list of allegations from WPP that Mr Benatti weaved a web of corruption during his four years as consultant to WPP Italy. And it is likely to trigger renewed demands from WPP that the Italian financial regulator, Consob, investigates FullSix and Mr Benatti for potential conflicts of interest.

WPP alleges Mr Benatti channelled new business opportunities into FullSix throughout last year, when he should have been offering them to WPP companies. Mr Benatti denies this.

The Italian was sacked by Sir Martin in January after an investigation by the corporate sleuths Kroll said Mr Benatti had defrauded WPP. The allegation, vigorously denied by Mr Benatti, is that he secretly controlled another marketing firm which was sold to WPP in 2002.

Since then the two men have traded insults and allegations, to the entertainment of the rest of the global advertising industry.

Mr Benatti's allies on the FullSix board were able to out vote supporters of Sir Martin yesterday. At previous meetings they have batted away attempts to begin a more detailed investigation of Mr Benatti's business dealings.

After talking to advisers, the company's board decided Mr Benatti had made "a fair offer" for the 56 per cent of FullSix he does not already own. WPP, which has increased its stake to just below 30 per cent, is unlikely to yield to the takeover.

WPP says Kroll's investigations into Mr Benatti's business affairs are continuing and further sackings are possible within days. An update is expected when the company reports results tomorrow.