WAR has broken out between ousted IndigoVision founder Oliver Vellacott and the video-over-internet company's non-executives Hamish Grossart and Andrew Fulton, the ex-Tory chief, as he enlisted veteran financier Sir Peter Burt in an attempted boardroom coup.

Mr Vellacott, whose exit was announced on Friday, has used the might of his 22.9% stake in the Edinburgh company to force a shareholder meeting.

This will see some of the biggest names in Scottish business and politics scrap over the future of a company with a stock market value of just £19.4m.

Mr Vellacott is seeking election to the board along with allies Sir Peter, former governor of the Bank of Scotland, and Waverley Cameron, a member of the Edinburgh stationery dynasty who has worked with electronic security companies on both sides of the Atlantic.

He is also demanding the ousting of chairman Mr Grossart, one of Scotland's best-known financiers, and his fellow non-executive Mr Fulton, a former agent with MI6 who until last month chaired the Scottish Conservatives.

To succeed, Mr Vellacott needs the backing of 50% of shares cast at the meeting, including his own stake, and already claims the backing of institutions accounting for 10% of shares for the removal of Mr Grossart.

IndigoVision's directors said: "In the board's view, the requisition is the latest in a series of misguided attempts by Oliver Vellacott to gain control over IndigoVision without paying an appropriate premium to shareholders."

They said the board "will set out the chronology of events leading up to the requisition" in its notice for the meeting, which must be held within 28 days.

It is understood the two sides fell out over a plan set out by Mr Vellacott in September that could have seen the company taken private. This was either designed to give it valuable liquidity and protection from takeover or to enable him to purchase it at a "derisory" price, depending on which sources one talks to.

It is further understood that there was a dispute over the phrasing of a recent trading update.

Mr Vellacott, who founded IndigoVision 17 years ago, said: "IndigoVision has a great future and a solid executive team but I am strongly of the view that the direction in which the chairman is taking the board and the company is not wise. I look forward to getting back into the business and bringing on board some new directors with a fresh perspective on how to take the company to the next stage of its development."

If Mr Vellacott's bid succeeds, Sir Peter will become chairman and new chief executive Marcus Kneen and Holly McComb, his replacement as finance director, will be retained. It is not clear what Mr Vellacott's position would be.

The development marks a deepening of hostilities since Mr Vellacott went public, minutes after IndigoVision's announcement of his departure, with a claim that he was dismissed.

Mr Grossart, who is also deputy chairman of Greenock-based British Polythene Industries, retorted that Mr Vellacott had been offered the executive deputy chairmanship but had declined.

Yesterday's news prompted IndigoVision shares to plunge 22.5p or 8% to 257.5p.

IndigoVision, which has a workforce of 150 and employs 90 people in Scotland, supplies internet-based CCTV surveillance systems to airports, casinos and government buildings around the world.