Payzone's chief executive John Nagle and chief financial officer John Williamson have informed the company's non-executive directors that they plan to sue them for damages over the manner in which they were dismissed from their positions earlier this month. Ciarán Hancock, Business Affairs Correspondent, reports.

The two executives issued a statement yesterday confirming that they had "notified the non- executive directors of Payzone plc of their intention to issue proceedings against them in respect of reputational damage, amongst other things, arising from recent events".

A source close to Payzone described the move as a "PR gimmick", adding that it was a "non issue".

The source said the statement issued by Payzone in relation to the departure of the two directors had been "moderate and kind" in its language and that the decision was supported by all non-executive directors and a majority of shareholders.

The letters were sent earlier this week to Payzone's non-executive directors. These include chairman Bob Thian and Mark Evans, who represents Balderton Capital, Payzone's biggest shareholder, on the board.

On January 16th, Payzone announced that Mr Nagle and Mr Williamson had left the company.

In a statement to the stock exchange, Mr Thian said: "John Nagle and John Williamson have created a strong platform for growth at Payzone but the company has now reached a stage of its development where a different set of skills is required."

Mr Nagle and Mr Williamson later secured an interim injunction from the High Court in Dublin reinstating them to their roles.

They argued that the board meeting that took the decision to remove them from their posts - which they did not attend - was not properly convened and that the terms of their contracts had been breached.

That case is due to resume in the High Court on Tuesday. Payzone's shares, which are listed on the Alternative Investment Market in London, were suspended on January 17th pending the outcome of the legal action.