David Cameron 's Conservatives are fighting to keep the Henley seat
The Conservatives are threatening legal action against the Lib Dems over a leaflet in the Henley by-election.
They have written to the Lib Dems over allegations concerning a local community hospital, which they say their candidate has always supported.
The party has instructed its solicitors to "pursue the matter legally" but a writ has yet to be issued.
A Lib Dem spokesman said they would not be withdrawing the comments, adding: "We feel we are on firm ground".
The row centres around a campaign to save Townlands community hospital, in Henley.
The Tories are angry about claims in a Lib Dem leaflet that Tory candidate John Howell watched the campaign "from the sidelines," when they say he was involved in it.
On his website, Lib Dem candidate Stephen Kearney quotes hospital campaigners denying any contribution into the campaign by Mr Howell "despite Conservative leaflets claiming otherwise".
The Conservatives had earlier threatened to take legal action if they had not received a retraction by mid-day but a Tory spokesman said it was now unlikely to happen on Friday.
Liberal Democrat Chief Executive Lord Rennard said: "In relation to the Henley Townlands hospital campaign, we have merely repeated claims by the independent hospital campaigners that they were unaware of any support from the Conservative Party candidate," he said.
He added: "The Conservatives seem to be running scared in what used to be a very safe Conservative seat."
A Conservative spokesman confirmed that legal action was now focused on the controversy surrounding the community hospital, rather than a separate row about the use of an image of the outgoing MP Boris Johnson on a party leaflet.
The 26 June by-election was called when Conservative Boris Johnson stood down as Henley MP after being elected London mayor.
Mr Johnson won the seat with a 12,793 majority in 2005.
The list of candidates nominated, according to the returning officer, are:
- Chris Adams, UK Independence Party
- Derek Allpass, English Democrats
- Louise Cole - Independent (Miss Great Britain Party)
- Amanda Harrington - Independent (Miss Great Britain Party)
- John Howell - Conservatives
- Stephen Kearney - Liberal Democrats
- Richard McKenzie - Labour
- Bananaman Owen - Monster Raving Loony Party
- Timothy Rait - British National Party
- Dick Rodgers - The Common Good
- Mark Stevenson - Greens
- Harry Bear, The Fur Play Party