An error by Google Maps which wrongly gave Nicaragua a tiny parcel of land in Costa Rica is threatening to escalate into a continent-wide dispute.

Nicaragua says it will take its quarrel with Costa Rica to the international court of justice after it took over a San Juan river border.

The Nicaraguan president, Daniel Ortega, said the country will not remove its 50 soldiers from the Calero Island section of land, and accused the Organisation of American States (OAS) of making matters worse with Friday's diplomatic intervention, in which it requested the two neighbours to meet before November 27 and called on them to refrain from deploying armed forces in the area. A majority of the 35 member countries voted in favour of the resolution, which Costa Rica hailed as a "diplomatic victory". Google said on Friday that it had used faulty data to create the initial online map, which has now been updated.

But Nicaragua refused the OAS request. Ortega, who has been president since January 2007, said the OAS had "completely killed" any possibility of the dispute being resolved through dialogue – and went on to accuse a number of neighbouring countries of being influenced by the drugs trade.

"That OAS meeting completely killed the possibility of dialogue," he said. "They killed it because they started to establish conditions. I repeat, on a matter of principle, we are not leaving any area within Nicaraguan territory along the borders with our brotherly nations of Costa Rica and Honduras, nor are we pulling any of our forces from any maritime borders. Not the army, not the police who are in the fight against drug trafficking."

The president's dispatch riled nearby Mexico, which sent a diplomatic letter to the country in protest at its "unfounded and unjustified accusations". Costa Rica accused Ortega of "recklesskly [launching] accusations about drug trafficking against various Latin American nations in his desire to distract his people from the overwhelming defeat suffered [in the OAS resolution]."

Ortega went on to accuse Mexico, Colombia, Panama, Honduras and Guatemala of being influenced in their OAS vote by the drug trade. Mexico's war against drugs trafficking is reported to have claimed more than 28,000 lives since President Felipe Calderón launched a crackdown on the influential cartels nearly four years ago.

Nicaragua moved security forces into the contested river border late last month to carry out a dredging project. An official in charge of the project told a local newspaper that he had used Google Maps to decide where the work should take place, though the mapping service later turned out to be incorrect. Costa Rica described the move as an "invasion" and appealed to the OAS for a resolution.

The ownership of Calero, a small section of land near the Atlantic coast, has been contested by the Central American nations for two centuries.

Google said in a blogpost that it had used faulty data from the US State Department which led to the error.

Costa Rican president Laura Chinchilla said the country "is seeing its dignity smeared and there is a sense of great national urgency" to resolve the dispute. Around 70 Costa Rican police officers have been seconded to a town near the contested area.