THE festering industry row over Diageo's decision to switch its Cardhu brand from a single malt to a mixture of malts from different distilleries exploded into the public realm yesterday after rival William Grant & Sons wrote to every MSP accusing Diageo of ''gambling on might being right''.

In a letter sent by e-mail, William Grant called on MSPs to give serious consideration to this ''attack'' on the industry, and its long-term impact on the reputation of Scotland as ''a nation of honourable and honest businessmen and women''.

The letter, signed by William Grant press spokesman Jack Irvine, also warned that the story would ''catch fire'' in the coming days in overseas markets such as the US, Spain, Portugal and Japan.

''At stake in this looming struggle for market share and dominance could be jobs, lost export revenues and a blow to both the Scottish economy and the UK exchequer,'' the letter said.

''The dispute has already begun to encroach on mainland Europe. Thousands of consumers in Spain, Portugal, Greece, France and Hungary are blissfully unaware that they are being duped.''

Amid the final paragraphs, the company concluded: ''Perhaps this cavalier attitude is not surprising because remember, Diageo is the company which introduced Smirnoff Ice - the only trouble was that it contained no Smirnoff!''

A spokesman for William Grant confirmed that Irvine had been hired to represent the company on this issue, and was speaking on behalf of it alone.

However, others within the industry have also expressed their concern since Diageo, which accounts for about half of all whisky distilling in Scotland, announced the changes to Cardhu in July. The row centres around Diageo's decision to start filling its Cardhu-branded bottles with a mixture of malts from other distilleries.

This is the result of the rising popularity of the Cardhu malt, stocks of which are running low and threatening Diageo's ability to meet demand that has soared from 30,000 cases in 1993 to 280,000 cases in the current year. The company has kept the Cardhu name, but replaced the phrase ''single malt'' - a drink from a single distillery, and regarded as a premier product within the industry - with the phrase ''pure malt''.

Diageo's smaller rivals in the industry are concerned this minor alterations to the packaging will not be picked up by consumers, but will ultimately leave them feeling duped about the cachet of the product they are buying. They say this could have a major detrimental impact on the industry, as single malts have been leading the way for the last few years in terms of driving up the value of Scotch whisky exports.

Diageo and the Scotch Whisky Association are in continuing discussions about these issues, and say talks will continue despite yesterday's developments. However, a spokeswoman for Diageo said the company found it ''regrettable'' that William Grant had decided to go outside the SWA forum before those discussions had reached completion.

She added that Diageo ''was aware'' that Grant's had threatened civil action if the matter is not resolved by the SWA.