Hewlett Packard has accused British software firm Autonomy of bloating its value before the US computing giant acquired it for $10.3bn or £7.1bn last year.

HP said it was "extremely disappointed" after it claims an internal investigation found evidence of "serious accounting improprieties" at the Cambridge-based company.

The announcement comes as HP reported a non-cash impairment charge of $8.8bn relating to Autonomy in its fourth quarter financial results.

The internal investigation was launched after a whistle-blower from Autonomy's senior management came forward alleging questionable accounting and business practices at the software firm. Nine months after the sale the chief executive and founder of Autonomy, Mike Lynch, stepped down. But a spokesperson for the 47 year old, who made more than £500m from the deal, says that Dr Lynch "flatly rejects" the "false allegations".

HP has said that as well as referring the matter to the regulatory authorities, it would be taking civil court action against "various parties" to recoup money for its shareholders.

Shares in HP fell more than 13 per cent in the opening minutes of trading in New York to change hands at $11.50 each. So far this year shares in the struggling firm have fallen by almost 50 per cent.

Written and presented by Alfred Joyner