The BBC's Peter Morgan: "The government cannot be expected to pay for treatments just because industry wants them to"

The warning from the chairman of Glaxo Wellcome comes as the latest broadside in the row over the rejection of the anti-flu drug Relenza for National Health Service prescriptions.

Glaxo Wellcome is threatening legal action against the government after the drug was rejected for prescriptions on the NHS.

The company wants a judicial review after the decision by the National Institute for Clinical Excellence (Nice) - the body which assesses new treatments.

The institute said there was not enough evidence that Relenza - a powder spray inhaled through the mouth and costing £24 a time - was cost effective.

Chairman of Glaxo Wellcome, Richard Sykes: "One of the finest examples of technological industry in Britain"

But Glaxo Wellcome chairman Sir Richard Sykes hit out at the decision on BBC Radio 4's Today programme.

He said the company was not threatening to pull out of Britain, but he warned: "If (the government) continues to make the environment antagonistic to this industry then obviously it will start to move elsewhere.

"It is something which needs to taken into consideration."

'Serious threat'

Sir Richard said ministers should bear in mind that Glaxo Wellcome does 50% of its research in Britain even though 94% of its business was outside the UK.

In a letter to Health Secretary Frank Dobson published in the Sunday Telegraph, Sir Richard said the decision represented "a very serious threat to the future of one of the UK's most successful international industries."

Relenza is said to reduce the length and severity of flu if taken at the right time.

A leak of Nice's decision on Friday wiped 2% off Glaxo shares as the market feared the decision could limit Relenza's sales potential.

The institute warned that the drug could cost the NHS £115m if there was a flu epidemic.