The long-running legal dispute between property tycoon Larry Silverstein and Swiss Re over the World Trade Centre insurance isn’t over – it’s just getting nastier. The reinsurer’s lawyers have alleged that evidence produced in discovery shows Mr Silverstein’s elaborate “two-occurrence” argument is a hoax.

Mr Silverstein argued that his insurance allows him to claim twice on the same policy for both towers, because the September 11 attacks were two defined events. The insurance team led by Swiss Re insists the attacks were one event using two aircraft.

“[The] entire Silverstein case is a fiction conceived by lawyers and public relations advisers immediately after September 11, 2001,” a lawyer for Swiss Re said. “We describe the filing as a multiple smoking gun.”

Swiss Re North America Chairman and CEO Jacques Dubios said Silverstein Properties “knowingly and deliberately” underinsured the World Trade Centre complex. He said new evidence shows that Silverstein actually wanted to insure the centre up to a $3 billion limit, less than half the coverage he actually bought.

Swiss Re says that it was only after pressure from his lenders that he increased the coverage to $7 billion to protect their debt exposure.

But Mr Silverstein is determined to see the case through. “The only hoax is the one Swiss Re is perpetrating in the courts,” he said. “These guys are desperate because they have a losing case.”

Everyone goes back to court next month.