An Post is facing a claim for $210 million (£154 million) in a US court battle with the company that designed its most important software.

Escher, the Boston-based firm that last year said it was suing An Post for $70 million, said it had increased its damages demand. The increase is based on Escher's claim that it can show the State-owned company had deliberately compounded matters.

An Post said last night it did not accept Escher's claims. The company said it had contested the case vigorously and would continue to do so.

At the centre of the dispute is the rights to Riposte, a software programme written by Escher which runs post office payments. In the Republic, the system delivers hundreds of thousands of social welfare and State pension payments every week. The ownership of the software is important because the two companies have together marketed it to many other countries. Last November, Escher accused An Post's chief executive, Mr John Hynes, of scuppering the sale of the software company to Andersen Consulting. It later suspended its action for damages, pending a court ruling on who owned the various versions of the Riposte programme.

In an interim ruling, a US judge said he thought An Post could demonstrate a reasonable likelihood of ownership in "something", but said he was, for the moment, not entirely clear about what that was.

But he gave Escher the rights to sell the current and future versions of the programme.

Escher said yesterday it planned to site its European support base in Dublin and had already leased 14,000 sq ft in the Sandyford industrial estate. The move will require 70 workers almost immediately, growing to 150 over two or three years, Escher said.

The renewed damages claim accuses An Post of shirking its responsibilities under a joint marketing agreement, trying to stop Escher from selling Riposte to the German, Danish, Hungarian and Austrian post offices, making false statements about the software and hindering attempts by Escher management to sell the company.

Claiming that An Post persisted in harming the smaller company, Escher is now demanding three times the $70 million it originally sought. Under US law, Escher is entitled to triple its claim if it can show that An Post deliberately compounded a wrong.