MCI's internal investigations have shown that its call termination practices comply with legal and regulatory requirements, and that AT&T's claims to the contrary have been made for competitive gain, according to MCI.

The former Worldcom also heard today that its proposed $500m cash settlement with US Regulator the Securities and Exchange Commission has been approved by a bankruptcy court in New York.

In a filing with the court earlier this week, MCI stated that AT&T's filing of objections to the company's plan of reorganisation were designed to "delay and derail" MCI's efforts.

"We fully expect that AT&T will escalate its efforts to attempt to obstruct the company's reorganisation efforts, and urge that any such tactics be viewed in the highly-charged competitive environment evident in this case," said MCI.

The telco added that claims by AT&T that MCI has avoided the costs of access charges, and that AT&T is not fairly compensated for its role in terminating traffic, were false and that no classified traffic was routed through Onvoy.

MCI claimed that its contract with Onvoy, which provides 'least-cost routing' services, is "completely legal and commonplace".

It added that there was nothing "even remotely" illegal about Onvoy routing domestic traffic via Canada.

MCI declared that it does not, and has not, routed traffic through Canada even though there would be nothing illegal in doing so.

The troubled telco has now completed another stage of the process designed to allow it to emerge from Chapter 11 bankruptcy protection.

But it is still under fire from lobbyists furious at the firm's past $11bn hole in its accounts, and faces being barred from bidding for lucrative US federal government contracts.