Live sports and entertainment giants Madison Square Garden Company and AEG have ramped up their battle over a new arena planned by the former in London, with MSG hitting out at what it claims are “underhanded methods” employed to undermine its project.

The latest development in the war of words between the two companies comes after The Times newspaper reported at the weekend that AEG, which owns and operates The O2, had appointed the Sans Frontières Associates agency to drive a campaign against the MSG Sphere project.

The agency is said to have launched social media accounts and erected billboards under the banner of Newham Action Group, but these have since reportedly been removed following complaints over the legitimacy of the claims made through them.

In March, MSG submitted a planning application for its proposed new venue in London, with an array of eye-catching technology features part of the proposal. The plans for MSG Sphere were lodged with the London Legacy Development Corporation (LLDC), as MSG targeted the development of its first major venue outside of the United States.

Located in the heart of Stratford, East London, MSG Sphere’s main venue would have a scalable capacity of up to 17,500 seated, or 21,500 when there is a mix of seated and standing. The latter, in theory, would be greater than the official capacity of The O2, the nearby arena operated by AEG.

In a statement reported by the Pollstar website, an MSG spokesperson said: “People in Newham have the right to know who is really behind the Newham Action Group, where their funding is coming from, and the motives of the shady lobbyists who are really behind them.

“We’re extremely disappointed that such underhanded methods, which include the Newham Action Group claiming to represent residents, could be tolerated in London – one of the world’s greatest cities, which has acknowledged the importance of continued investment.

“We understand the tactics used by the lobbying agency go well beyond simple posters and social media, and include aggressively spreading myths and fear amongst local figures. They also used the Newham Action Group to attack and undermine the Mayor of London, Newham Council, and the LLDC in an attempt to purposefully mislead residents.

“MSG’s plans in Newham would support thousands of jobs and create billions of pounds of economic benefit across London. Genuine concerns should always be addressed and we’re continuing to engage extensively with the community; but fake ones manufactured by shady lobbyists to subvert democracy should be unacceptable to everyone. We urge anyone who cares about the Newham community to condemn this behaviour in the strongest possible terms.”

The LLDC’s consultation on MSG’s planning application is due to end on Friday and AEG has reiterated its opposition to the project. It said: “AEG does not oppose competition in the music industry, and specifically does not oppose another large music venue/arena in London. But (we) do believe that such a venue should not be located so close to existing venues at the Olympic Park – such as the London Stadium and Copper Box – as well as The O2 arena.

“It is imperative that Madison Square Garden’s proposals do not add to congestion in the area, especially on the Jubilee Line which is critical for the movement of guests to and from The O2 arena. AEG has been clear in previous statements that the business strives to ensure that its guests have the best possible experience when they visit its venues and that it will work with local stakeholders to scrutinise the application in detail and ensure MSG’s plans do not affect this. The MSG Sphere proposal is of such a scale and potential impact that a planning decision cannot be made solely on the impacts it might have on the immediate locality.

“AEG’s concerns about the location of the proposed new venue are not a secret and have been voiced publicly with a media comment, as well as privately in meetings with local stakeholders. To support this AEG has worked over the last year to determine the likely impacts of the MSG proposal and has engaged with many professional groups including lawyers, transport, planning and communications consultants to assist with producing formal response documents, detailed evidence-based reports on the detrimental impacts of the scheme, and a communications approach to make its concerns about the scheme known.

“AEG became further concerned that during the pre-application process in the second half of last year there appeared to be little local understanding of the MSG proposals. AEG believed that it was right that residents had reliable information about the potential negative impacts of the scheme before an application was submitted, and therefore created a web page and paid for advertising hoardings, through a media buying agency, to be placed around Stratford in the name of the Newham Action Group.

“AEG drew from MSG’s own papers for the messaging appearing on these hoardings and they are entirely consistent with the position AEG is taking in its response to the planning consultation.”