A US court ruled on Friday that DaimlerChrysler's heavy truck division, Freightliner, will have to pay US$350m in damages related to alleged accounting fraud at UK truck manufacturer ERF.

A spokesperson told Reuters that DaimlerChrysler will appeal the case.

Last year a British court ordered Freightliner to pay at least £250m to MAN, which now owns ERF. MAN bought the company from Western Star, which is now owned by Freightliner.

The British court found that ERF's financial controller had been guilty of defrauding MAN through an accounting scam over several years. MAN said it had acquired ERF thinking it was profitable only to find it was loss-making.

MAN filed a suit in London against Freightliner in 2002. That court is set to decide final damages next year.

Earlier this month Freightliner announced that it would lay off up to 4,000 workers in the first quarter of 2007 in response to a forecast fall in the US truck market.