"What, exactly, are you looking for?" asks the nervy middle-aged woman at Herzogenaurach's tourist information office. She is really very nervy. Probably because she knows that what most who come to this north Bavarian town are looking for is a fight. But not any old fight.

There is only one feud in Herzogenaurach worthy of mention and it's between Adidas and Puma. Founded in the town by two warring brothers, the international sportswear giants have been based here since the 1940s, and their age-old rivalry is legendary.

And, with less than two months to go until the World Cup in Germany, the battle is unparalleled in its intensity. To kit out the winning World Cup team is the ultimate prize for any sports manufacturer. Companies spend billions each year sponsoring the top stars and the most popular teams at football tournaments all over the world in an attempt to raise their brand's profile.

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Some believe the firm that wins the sponsorship battle on home turf will be crowned the outright winner in Herzogenaurach's decade-long sports shoe war. Others say, whatever happens, it will just make the one-upmanship worse. Adidas is kitting out six teams. Puma, long regarded as the underdog in the fraternal war, is quietly claiming that it has already won, since it has 12 teams on side.

"Some of the stories you hear are just mind-blowing," says Filip Trulsson, marketing manager of team sports at Puma. The Swedish-born 33-year-old has a Scandinavian sanguinity about him, and a detachment from local politics that has probably prevented him from going mad during the eight years he has spent working in this conservative countryside town. "Puma people not marrying Adidas people, Adidas and Puma gangs in the schools, pubs loyal to one firm refusing to serve workers from the other, it's all gone on here," he said, shaking his head. "But there are a lot more international people here nowadays. I think the locals take it all far more seriously than the foreigners do."

Herzogenaurach has been described as "the town of bent necks," as no local would start a conversation with another without first looking down to check which firm's shoes they were wearing. The town managed to spawn two local rival football teams with pitches not more than 100 metres from each other - RSV is sponsored by Adidas, FC Herzogenaurach by Puma.

Then Mr Trulsson remembers something else. "Wait until you see the graves," he says. "Man, those brothers must have really hated each other." On the edge of town, in Herzogenaurach's small sunny cemetery, the graves of Adolf and Rudolf Dassler could not be further apart from one another. Even in death, it seems, they couldn't bear to be together.

Born into a family of cobblers, Adolf and Rudolf Dassler were not always at odds. In the 1920s, Adi and Rudi, as they were more commonly known, worked happily side by side at the Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory).

Adolf developed some studs, business boomed under the Nazis and by the 1936 Olympics Jesse Owens was running in Dassler spikes. But by the fall of the Third Reich the fraternal relationship was in tatters. "We will probably never know the real reason why Adi and Rudi fell out," sighs Ernst Dittrich, the head of Herzogenaurach's town archive. "It was like a marriage that goes terribly, terribly sour."

Elderly residents in this 13th century town still gossip that the brothers split because Adi slept with Rudi's wife, that the two wives hated each other, that Rudi fathered Adi's son and that Rudi - the less successful entrepreneur of the pair - had his hands in the petty-cash box.

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The most likely snapping point came from a thoughtless comment made one night in 1943 as the two brothers and their wives slept in the family air raid shelter. "There come those pig dogs again!" raved Adi as his brother clambered down the steps. From that moment, no one could convince Rudi that Adi had been talking about the RAF bombers, not about him.

Rudi's bitterness increased as he was shipped off to an American prisoner of war camp and Adi carried on running the family business without him. In 1948 Rudi returned and set up his own factory on the other side of the river, now Puma, taking loyal staff with him.

There were varying successes on both sides as Herzogenaurach's two shoemaking companies grew. Although Puma still claims it invented the removable football boot stud, Adi Dassler and his Adidas company is credited with winning the 1954 World Cup for Germany by providing the team with them.

But Rudi scored points against his brother when Pele won the 1962 World Cup for Brazil - in Puma boots.

The pair threw ludicrous amounts of money at absurd court battles. In 1958, Rudi Dassler and Puma took out an injunction to prevent Adi marketing Adidas stock as "the best sports shoes in the world". The court ruled in Rudi's favour but gave Adi a week to remove all advertising. In the seven days he had left, Adi convinced an Adidas-loyal fishmonger to paste the slogan on his fish van and park it outside Rudi's office window.

The tit-for-tat ethic continued through the generations. In the early 1980s, a young Boris Becker knocked on the door of Adidas with a Romanian manager, hoping for a sponsorship deal. When Adidas boss, Horst Dassler, refused, his manager, Ion Tiriac, drove straight over the river to Puma and demanded a meeting. "Go on," he taunted Rudi's son, Armin Dassler, who was the Puma chief. "Take on Boris. That'll really make your cousin mad." It was all Armin needed to hear to sign the then unknown Becker under a £100,000 advertising contract.

In the Cafe Rommelt, a group hunched over their beers are all wearing Adidas; workers at both firms enjoy large discounts on the newest gear, and most of Herzogenaurach's 25,000 burghers amble among the ancient wood-beamed houses and cobbled streets in tracksuits.

But the younger generation hanging around the pedestrian precinct don't appear to choose their friends according to the shoes they wear any more. One teenager, licking an ice-cream, wears Puma. His friend, who is kicking a bench, has got a pair of Adidas on, and the third, clearly a town rebel, wears Nike. Secrets are no longer swapped at the bus stop by the unfaithful, but designers who move between Puma and Adidas are all forced to take extended leave before starting their new jobs, to prevent them taking corporate secrets with them.

At managerial levels, the atmosphere has also relaxed. "One of Rudi Dassler's grandsons now works as a legal consultant for Adidas," says Trulsson. "Something like that, even a few years back, would have unimaginable. It would have been like ... er, like one of George Bush's grandsons working for Saddam Hussein."

Puma has certainly scored points against Adidas in Germany's World Cup year. The Adidas stripes may be adorning the official World Cup balls, and Adidas is an official Fifa partner, but Puma's shares have rocketed, with sales expected to top €2.3bn (£1.6bn) this year due to an increase in the purchase of soccer goods.

Puma is the smaller company, with about 4,000 employees worldwide compared with Adidas's 17,000, and its sales fall far short of those of its competitor, but Puma's profit margins are better. Investors at Adidas have raised concerns about the company's future, after its recent acquisition of Reebok.

Back in Herzogenaurach, the locals certainly know how to exploit the battle of the brands. "Some painters who were commissioned to paint the outside of the Puma building rolled up to put up the scaffolding all wearing Adidas shoes," recalls Ernst Dittrich, the town archivist. "Within minutes, the boss had them all inside and gave them the latest Puma trainers to put on instead. It worked so well that they went and turned up at Adidas the next month wearing Puma."

It's just a pity, says Ernst Dittrich, that Herzogenaurach will probably never get a much-wished for joint shoe museum. "I doubt the two companies would ever be able to agree on a common history," he sighs.

Fifa says the World Cup is "arguably the biggest media event on the planet" and Adidas clearly wants to win. "Adidas has long been the world market leader in football," said a spokeswoman, Kristin Koopmann, with more than a hint of Schadenfreude. "We might be only kitting out six teams, but as you can see, they are the teams with the best chances." The company is also sponsoring Argentina, France, Japan, Spain, and Trinidad and Tobago. Yet Puma may yet have the last laugh. The last World Cup final was watched by a billion people and a similarly huge audience is expected when this year's tournament concludes in Berlin in July.

Perhaps Germany will win and Adidas will claim victory. But Puma has already moved on, taking the competition out of Herzogenaurach, out of Germany and out of Europe to a different continent. It is investing heavily in African football and supplies kit to eight African football associations. The next World Cup will be held in South Africa in 2010. Payback time? The Puma people flash quietly confident smiles. The company's long-term aim is to become the "most desirable sports-lifestyle company on the market".

High above Herzogenaurach, a young woman is heaving large bags of purchases out of the Adidas factory outlet. "I don't know what the fuss is about," she says. "At the end of the day, shoes are just shoes aren't they?"

And football? "Well that's just a game isn't it?"

Two empires head to head

ADIDAS:

Founded: 1949

HQ: Herzogenaurach, Germany

Employees: 17,023 (2004 figure)

Pre-tax profits in 2005: €768m (£531m)

Sales in 2005: €6.9bn (£4.8bn)

2006 World Cup teams sponsored by Adidas:

Germany, France, Spain, Japan, Trinidad and Tobago, Argentina

PUMA:

Founded: 1948

HQ: Herzogenaurach, Germany

Employees: 3,910 (2004)

Pre-tax profits in 2005: €286m (£197m)

Sales in 2005: €2.4bn (£1.7bn)

2006 World Cup teams sponsored by Puma:

Saudi Arabia, Ghana, Iran, Czech Republic, Poland, Italy, Ivory Coast, Paraguay, Switzerland, Togo, Tunisia, Angola