The bitter row over Carlos Tevez intensified today after Sheffield United launched the first legal steps in their bid to have West Ham docked points for breaching Premier League rules.

The Blades' lawyers say they have instituted "arbitration proceedings" against the Premier League, and want a three-man tribunal set up to rule on the dispute.

The Premier League have confirmed receipt of the claim but it is understood they are not obliged to agree to enter into the process. "We are considering the request," said a spokesman.

The latest development comes only 24 hours after Premier League chief executive Richard Scudamore wrote to all 20 clubs insisting the Argentina striker has been "properly registered to play for West Ham" since last August.

West Ham were fined £5.5million by an independent commission for having third-part agreements connected with Tevez and Javier Mascherano after signing them last summer. Such agreements are not allowed under Premier League rules.

Sheffield United, who were relegated on the last day of the season, are challenging the legality of an independent commission's decision to fine West Ham rather than dock the club points and cancel Tevez's registration.

The Blades said in a statement: "Sheffield United will seek: :: a declaration that the original decision and subsequent failure to act were unlawful, and that the decision should therefore be set aside; :: the setting up of a new disciplinary hearing against West Ham, with the hearing to consider the issue of the club's continued fielding of Tevez;

:: a hold on preparations for next season which wrongly assume that West Ham remains a Premiership club and Sheffield United is relegated to the Championship;

:: an assessment of the clubs' potential claim for damages."

The call for arbitration is based on the Premier League's own rules for deciding on a dispute, but both sides have to agree to enter into the process.

Under the regulations, the three-man tribunal is made up of one nominee from each side and a lawyer as chairman who is accepted by both parties.

League rules state the decisions of such arbitrations "are binding".

The Premier League had been desperately hoping to avoid a damaging split and the six-page letter from Scudamore and league chairman Sir Dave Richards says there is no issue over whether Tevez was eligible or not to play for the Hammers.

It adds that there has been no precedent set meaning the club should have been docked points for having a third-party agreement.

The letter says: "Tevez has been properly registered to play for West Ham United since August 31 2006. The Board, under our Rules, is charged with the authority to determine this. He continues to be registered with West Ham United.

"This is a case without precedent and certainly cannot be compared with clubs who have played unregistered players or players ineligible through suspension.

"On April 26 West Ham United admitted to breaches of rules B13 and U18 - for which they have been fined in accordance with our rules.

"The offending third-party agreement has been terminated by West Ham United and therefore they are not continuing to be in breach."

The letter goes on to state that had West Ham submitted the agreements back in August, the League would have told them merely to remove the offending clauses rather than taken disciplinary action.

"This is a common occurrence all clubs are aware of as the League seeks generally to help clubs register players not prevent them," says the letter.

"Third party agreements exist in many varied forms throughout football - banking or finance agreements, players' commercial arrangements, agency or representative agreements - many of which do not fall under the Premier League's jurisdiction and do not contravene our rules.

"We are the only league to our knowledge that has such a rule - neither the Football League, FA nor FIFA have one."

Sheffield United plc chairman Kevin McCabe insists he has not given up hope of salvaging his club's Barclays top-flight status and has made the radical proposal of expanding the competition to 21 teams next season in order to save both the Blades and West Ham.

McCabe said: "It is up to the FA Premier League to find a way round this exceptional circumstance where a club which has played by the rules has been relegated at the expense of one club who have fielded ineligible players.

"The simple answer is why not have 21 clubs in the Pemiership next season and relegate four of them at the end. It is not my decision to make but it seems like a very simple solution."