Formal moves have begun in the largest single claim for compensation ever made against the NHS, a computer contractor revealed last week.

Fujitsu Services said it had issued a procedure initiation notice to the IT agency NHS Connecting for Health following the termination of a £900m contract. The company’s in-house legal team is understood to be seeking up to £700m in compensation.

The claim is attracting widespread interest as a test of the government’s ability to make private suppliers shoulder the risk of developing IT systems. Fujitsu’s contract with the Department of Health dates from 2004, when the company was named as one of four ‘local service providers’ to computerise the NHS in England. The department said the contracts broke new ground by requiring payments only on delivery of working systems.

In 2007, however, with large parts of the £13bn programme running behind schedule, Fujitsu opened talks to ‘re-set’ the deal. These broke down earlier this year and in May the department issued a termination notice. Neither side would comment on the claim itself.

Fujitsu said the notice was ‘the first step in the process established by the contract to resolve issues’. The Department of Health said it is ‘working closely with Fujitsu to ensure a smooth transition’.