Federal prosecutors in the US have said data from users of Megaupload could start being deleted by Thursday – but the lawyer for its founders says if the servers are wiped his clients will be less able to defend themselves in court.

US prosecutors have blocked access to Megaupload and charged seven men including founder Kim Dotcom, who is based in New Zealand. It is alleged the site has facilitated millions of illegal downloads of movies, music and other content.

The company says its millions of users stored their own data, including family photos and personal documents.

Megaupload hires outside companies to store the data for a fee. But the government had frozen its money, Megaupload attorney Ira Rothken said, so those companies were not getting paid.

A letter filed in the case on Friday by the US attorney's office said storage companies Carpathia Hosting and Cogent Communications Group may begin deleting data on Thursday.

The letter said the government copied some data from the servers but did not physically take them, and now that it had executed its search warrants, it had no right to access the data. Prosecutors said the servers were controlled by Carpathia and Cogent and issues about the future of the data must be resolved with them.

Spokespersons for the two companies and for the US attorney's office did not respond to messages on Sunday night.

Rothken said the company was working with prosecutors to try and keep the data from being erased. He said at least 50 million Megaupload users had data in danger of being erased.

Rothken said the data was also important so Megaupload could defend itself in the legal case.

"We're cautiously optimistic at this point that because the United States, as well as Megaupload, should have a common desire to protect consumers, that this type of agreement will get done," he said.

Megaupload is based in Hong Kong. The US authorities argue they had authority to act because some of its leased servers are in Virginia.