A company which bombarded Sussex firms with letters demanding cash for adverts they did not know they placed has been forced to stop.

Brighton and Hove City Council trading standards department has been looking into the practices of the Barcelona-based European City Guide.

The firm had sent letters to businesses in Brighton and Hove offering space in its European guide and internet directory.

Small print at the bottom said that by signing up, companies were agreeing to place adverts in three following editions of the guide, costing 787 euros (£488) each.

It later sent solicitors' letters demanding payment for the later adverts. But the Office of Fair Trading revealed the company has now been told to change its mailshots by the Catalan department of industry, commerce and tourism.

The OFT said more than five million mailshots were sent to European businesses over the past two years, mostly to British and French firms.

European City Guide has agreed to cancel half the 800 contested invoices the Catalan authorities received complaints about, some of which were for more than £1,000.

It has also agreed to obtain approval from the Catalan authority before issuing revised mailshots.

The OFT got involved after receiving more than 100 complaints from British businesses claiming they had been incorrectly invoiced.

It called on the Catalan authority to investigate and officials ruled the firm was guilty of seriously infringing Spanish laws on misleading advertising.

John Vickers, the director general of fair trading, said: "This case shows how government agencies can work together across borders to stop malpractices. Similar schemes may still be operating so businesses should be vigilant to guard against this kind of scam."

A spokeswoman for the council's trading standards department said: "Trading standards officials have been advising local firms not to pay. We would tell people to look closely at any documents that come through and be vigilant."

On Saturday we revealed how Pat Butler, a director of Zap Productions in Middle Street, Brighton, ended up paying more than £300 when she signed a form sent by the same firm in 1998.

She is still being sent solicitors' letters demanding more money.

Trevor Gellard, owner of Facques Gallery, in Kemp Town, was also billed after he filled in the form without realising the listing was not free.

He has ignored letters demanding payment.