Educational publishers are complaining that free phonics guidance provided by the Government is knocking their sales.
Five free copies of Letters and Sounds were sent to every school last summer, replacing the Primary National Strategies' previous phonics programmes Progression in Phonics and Playing with Sounds.
Publishers previously complained that sales were affected by the BBC's controversial pound;150 million digital project BBC Jam, which provided free online materials.
The Government spent more than pound;500 million giving schools credits to buy electronic resources from other publishers.
But the complaints and threats of legal action by publishers contributed to the BBC Trust's decision to abandon the scheme.
Publishers said they did not have plans to take similar action over the Government's free phonics guidance, but said it had affected their businesses. Chris Jolly, managing director of the popular Jolly Phonics scheme, said its school sales in Britain were down by about a third compared to last year, while retail and overseas sales are up.
He said he expected competitors would be facing similar difficulties.
"Letters and Sounds has had an effect," he said. "It is not surprising because in a competitive market this is a new programme which has two advantages over the rest of us. It's free and it comes with a strong government endorsement.
"I think it is much more effective for publishers to compete with themselves in providing materials for effective teaching. I don't feel this is an area for government."
Kathleen Donovan, managing director of Pearson Primary which publishes Rigby Star phonics, said: "We would support a school's own choice in using whatever resources they like, but when the Government decides to publish its own phonics programme it has a really big influence on what schools use."
A recent Ofsted survey of 20 primaries found that 12 had introduced `Letters and Sounds', seven were using another systematic programme and one was teaching phonics but not in a systematic way.
Jane Harley, head of primary literacy publishing at Oxford University Press, which publishes Read Write Inc and the Oxford Songbirds schemes, said: "Fundamentally, Letters and Sounds has given teachers a very clear structure and focus for phonics teaching. But for many schools the message that has filtered down is that `Letters and Sounds' is the only route."
Schools which have combined the guidance with commercial products include Goldsworth Primary School at Woking, Surrey. Its head of early years, Jackie Clapton, said she found Jolly Phonics a good way to teach letters and sounds.
The Government makes it clear on its website for the Rose Review into literacy teaching that schools can use any phonics programme they choose. It also publishes a list of commerical programmes.