Webster's appointment had been criticised because of his role on the audit committee at US Technologies, at a time when the company was hit by a financial scandal.

BDO Seidman has now decided to withdraw a lawsuit against US Technologies after the company withdrew objections to publication of documents supporting its former auditor's case.

Denis Field, chairman and CEO of BDO Seidman, said: 'BDO Seidman LLP is alarmed and disappointed by comments attributed to William Webster and Arthur Maxwell, in media reports today, suggesting that BDO Seidman did not raise concerns about material weakness in internal control with the audit committee and management of US Technologies during a July 13, 2001 conference call.'

BDO Seidman has published a note of its recommendations to US Technologies saying there were weaknesses in the organisation of the accounting department, because of the lack of a competent full-time CFO; in document retention and storage; and in recording significant transactions on a timely basis.