Development company Treasury Holdings has commenced legal proceedings against the National Asset Management Agency seeking damages worth hundreds of millions of euro.

In addition to pursuing damages, the company is also understood to be making a constitutional challenge to the NAMA Act.

The claim for damages is understood to relate to the Battersea power-plant site in central London.

Two years ago, NAMA acquired around €1.7bn of loans that had been extended by various banks to Treasury Holdings.

One of these loans related to the Battersea power-plant in central London. Bank of Ireland had lent Treasury €137m to develop the site.

NAMA appointed receivers to the site and a number of other assets belonging to the company - claiming that Treasury was insolvent and past the point of rescue.

Treasury was given leave to seek a judicial review in March, after it had argued NAMA's actions were irrational and an unfair exercise of the agency's powers.

It is understood that Treasury believes it has incurred significant damage since NAMA appointed receivers to the London site and as a result will miss out on hundreds of millions of euro in potential future profits.

A spokesman for NAMA this evening said it did not comment on individual legal cases but that it would be defending its position vigorously.