Fulham have submitted a claim for £700,000 in compensation from West Ham United.

The Independent says the Cottagers argue because they finished below the Hammers in the season that Carlos played at Upton Park. The claim appears to confirm the fear of "legal anarchy" that West Ham warned about.

The cash relates to the loss of so-called "merit money" that Fulham believe they missed out on because the 2006-07 campaign ended with them in 16th place, two points behind 15th-placed West Ham. They claim that, because of Tevez, they finished in a false position.

Fulham received £20.26m in merit money - the cash divided between the clubs from the television and broadcast deals brokered by the Premier League - with West Ham receiving £20.71m. The difference amounts to £450,000 - the extra cash they would have received in 2007 - but, confusingly, Fulham are understood to have submitted a claim for £700,000 which is the amount they would be due if the places were reversed this season.

The action was launched on Tuesday, the day after West Ham, who will fight it and have reacted with incredulity to the claim, announced they had reached an out-of-court settlement with Sheffield United of £20m, spread over the next five seasons, to end the Blades' long-running dispute over Tevez.