Denis O'Brien has called for Independent News & Media to hold an extraordinary general meeting to vote on the disposal of its London newspaper assets.
This afternoon, INM said such a sale would carry 'significant costs' for the group.
Mr O'Brien is proposing several other resolutions for the meeting, including the removal of Brian Hillery from his post of chairman of the group and the ending of annual payments of €300,000 to Tony O'Reilly in respect of his position as President Emeritus of the firm.
O'Brien, who is the second biggest shareholder in the group, also wants the group to sell or close the operations of The Independent in London and the Independent on Sunday. He also wants the group to stop the sale of its INM Outdoor - South Africa operations, but calls for the company to stop purchasing services from Cansult Communications.
He also wants a detailed account of all board member expenses since January 2000 to be prepared by a firm of independent accountants and circulated to all shareholders.
Last week Independent News & Media said its total revenues for the first six months of the year fell by 22% to €608.8m, while operating profits more than halved to €73.2m. Adjusted earnings per share fell from 7.5 cent a year earlier to 1.4 cent.
Exceptional costs of €86.8m - mainly due a writedown of the value of its newspaper titles as a result of the economic downturn - led to a pre-tax loss of €48.5m. INM's net debt rose to just over €1.3 billion in the period.
UK sale would carry costs, says INM
Independent News & Media this afternoon confirmed that it had received a letter from Denis O'Brien requesting a company EGM.
In a statement, it said that it is difficult to see how Mr O'Brien's actions assist in the resolution of the financial restructuring, which the board believes is in the best interests of the company and its stakeholders.
It says that while it is fully aware of Mr O'Brien's personal views on a number of matters, it notes that a number of resolutions proposed by him are at variance with decisions previously taken by the company's board.
The statement says that the sale and or closure of the group's UK national titles would carry 'significant guaranteed contractual costs' for the group. It also says the sale of INM Outdoor has been a key part of the group's deleveraging programme since the start of the year.
INM says there are no contractual obligations to Tony O'Reilly in his role as President Emeritus and no payments have been made to him in this regard.
After falling as much as 11% earlier, INM shares closed down one cent at 25 cent in Dublin.
Six-month 'truce' over
Today's move brings to an end an apparent six-month truce, reached after Mr O'Brien, a 26% shareholder in INM, succeeded last March in having the size of INM's board reduced and getting three directors of his choosing onto the board.
Mr O'Brien had been a long-time critic of corporate governance at the firm.
Last March CEO Gavin O'Reilly said the rivalry between the O'Reilly camp and the O'Brien camp was 'old news' and that the changes at board level represented the 'beginning of a new era' at the group. But now the split has never been more apparent.
Mr O'Brien, who is the second biggest shareholder in the group after Tony O'Reilly, built his shareholding in the company over the last three years, and has been an outspoken critic of how the business has been run.
In recent newspaper interviews, Mr O'Brien said the group should look at examinership as an option to protect itself from creditors.
Last week, detailing the group's results for the first six months of the financial year, chief financial officer Donal Buggy said management was focusing on running the business as a going concern, rather than through a court led process.