[Larimani]

LONDON (Reuters) - Online gaming firm Empire Online (EOL.L: Quote, Profile, Research) said on Monday that talks following an approach by larger rival PartyGaming (PRTY.L: Quote, Profile, Research) had broken down and it was planning to taking legal action against PartyGaming.

"The directors of Empire Online have explored whether legal action might be taken by Empire Online in relation to damage caused to it by the conduct of companies within the PartyGaming group in separating the poker system used by PartyGaming players from that of its "skins"," Empire said in a statement.

"Having received legal advice, the directors intend to institute and vigorously pursue legal proceedings as soon as possible," it added.

Skins are online poker Web sites, like Empire, that drive their poker players through to a software platform operated by another poker site like PartyGaming.