The US company suing the Diana, Princess of Wales Memorial Fund has said none of the 120 causes the charity helps will suffer as a result.
The Franklin Mint produces a range of Diana memorabilia
The Franklin Mint said it was determined to sue the Fund because it waged the "most nasty PR campaign against us and we think they should be held accountable".
It began a $25m (£15m) countersuit for malicious prosecution following the Fund's failed legal attempt to stop the Mint making products bearing the princess's image.
On Saturday the Fund told BBC News Online that although it had £46m in reserves it could not meet its existing £10m of commitments because it did not know the overall cost of the action.
It has frozen funding to its beneficiaries - many of which it says are "unpopular causes" which will struggle to find alternative funding.
Speaking on BBC Radio 4's Today programme, the Mint's UK spokesman, Steven Locke, said the lawsuit was necessary, despite the legal costs involved.
Although the action, which will take place in the US, could seriously damage the Fund, Mr Locke added: "I can guarantee to you that none of the end charities will lose out as a result of our action."
He said any money the Mint wins will be given to charity.
"In the past when we have given money connected to Diana we have always given it to charities that she supported in her lifetime."
The Mint also attacked the Fund's decision to freeze this year's grants.
Mr Locke said: "I think they (the trustees) have pushed the Diana fund into financial paralysis, basically to try and find a Cinderella who will rescue them, (or) alternatively to scare us into dropping our action.
The accusation was dismissed by the Fund, which said: "We're not in a financial crisis, we have £46m of uncommitted money.
"But because we don't know the maximum liability or timeframe (of the action) we can't continue to spend at the same rate that we have been spending."
On Friday the Fund said the legal suit legally obliged it to freeze funding.
The Fund helps causes which were close to Diana's heart
Many of the affected charities - which work with landmine victims, refugees, young offenders and people with learning disabilities, among others - expressed dismay.
Over the past five years, the Fund has awarded £40m to good causes, with much of the money donated by Diana fans in the wake of her sudden death.
Among the recipients is the Refugees Arrival Project, which told BBC News Online that unaccompanied children - some as young as five - who arrive at airports would be at "terrible risk" if its funding was cut.
On Saturday an Elvis memorabilia shop owner said he had warned the fund not to take legal action against the Mint.
Sid Shaw said it should have learned from the experience of Elvis Presley Enterprises of America, which his shop - Elvisly Yours - defeated in a High Court copyright battle.
In a landmark battle the US firm was told it did not have exclusive rights to put the name 'The King' on their products.
It was appealing against a 1997 High Court decision that a star's name, whether living or dead, cannot be used as a trademark.
Mr Shaw said: "The Diana Fund should have written to these big companies and said 'we would
love to work with you, we are trying to raise money in Diana's memory'.
"I can guarantee, all these companies would have agreed."