Business consultant PricewaterhouseCoopers (PwC) has been sued by the administrator of brokerage MF Global Holdings over advice that allegedly hastened the company's 2011 collapse.

The administrator is demanding at least $1bn (€728m, £601m) in damages from PwC over its advice on a $6.3bn European sovereign debt, according to a lawsuit filed in a US District Court in Manhattan.

PwC was accused of professional malpractice by offering bad advice concerning the off-balance-sheet accounting treatment for the debt in the lawsuit.

"PwC's professional malpractice and negligence were a direct and proximate cause of massive damages the company suffered," the complaint reads.

The administrator alleges that PwC already knew the investment would be risky to MF Global's already weak finances.

PwC called the lawsuit "meritless", adding that the accounting treatment which is the subject of the complaint was not found as incorrect by trustees, regulators and a congressional committee, who reviewed it.

MF Global collapsed in November 2011, after then-Chief Executive Jon Corzine's big bets on the European sovereign debt failed. The company and its finance subsidiary MF Global Finance USA filed for Chapter 11 bankruptcy protection in the Federal Bankruptcy Court in Manhattan. That was the eighth largest bankruptcy in US history.

After the company's collapse, a shortfall was found in the accounts of the brokerage's customers.

Subsequently, Corzine stepped down as CEO of MF Global on 4 November 2011, and US regulators charged him with the alleged misuse of $1bn of client money.

He is also facing litigations from former customers and a trust representing MF Global's parent company.

Effectively, as of 30 September, MF Global bet $6.3bn in sovereign debt linked to Belgium, Italy, Spain, Portugal and Ireland but when the crisis hit its peak, all products turned sour.