A delayed computer contract could cost a company millions of pounds as it enters legal proceedings which may drag on through most of next year.

Hyprotech, which employs 60 people at Harwell, and its former owners AEA Technology, are in dispute with KBC Process Technology of Walton-on-Thames.

At the centre of the row is a software program called HYSYS.Refinery, which was developed jointly by KBC and AEA Technology of Harwell and is designed to help the petrochemical industry.

KBC has now started legal proceedings in Houston, Texas, on Hyprotech and its new US owners Aspen.

KBC said in a statement: "These proceedings relate, among other things, to claims arising from Hyprotech's and Aspen's responsibility for the delay in the commercialisation of the HYSYS.Refinery product to the detriment of KBC."

AEA Technology sold Hyprotech in May, having bought the £40m turnover engineering software business in July 1997.

Hyprotech is now based in Canada, but employs 60 people at Harwell.

AEA Technology's sale is expected to take it into profit for the six months ending September 30.

KBC, by contrast, said the delay had hit profits. In a statement to the City, it said: "The continuing software dispute with AEA Technology and Aspen Technology has had a material impact on its ability to sell its software and consultancy services as a combined offering."

It said unless agreement was reached, legal action would last most of next year.

AEA Technology and Hyprotech declined to comment.