The contractor that refurbished Grenfell Tower has threatened legal action against Camden council in a dispute over its use of the same combustible panels on other residential blocks in the borough.

The London Borough of Camden evacuated hundreds of families from four towers on the Chalcots estate last weekend after it emerged that they were clad in flammable aluminium polyethylene-filled sheeting under a £150m PFI contract with Rydon. Fire brigade inspectors also raised concerns about a lack of fire doors and insulation around gas pipes.

The council leader, Georgia Gould, complained publicly that the cladding fitted under the contract with Rydon was not to the standard commissioned by the council and said: “We thought we were dealing with reputable companies and we feel let down.” She warned Rydon the council was taking urgent legal advice and said the cladding “did not satisfy our independent laboratory testing or the high standards we set for contractors”.

Rydon, however, strongly denies that the cladding was not up to the agreed standard and said it had been certified as compliant with building regulations by Camden’s building control department. It has demanded a retraction from Gould over what it claims is damage to its business reputation.

Its chief executive, Robert Bond, is understood to have told Gould in a letter that her “inflammatory statements are highly damaging to our reputation and our business and will be defended by us in the strongest terms possible”.

He concluded: “Given the seriousness of these allegations, I have no choice but to refer this matter to our legal advisers and to seek recourse from the council for the damage inflicted on this business.”

It was sent on Friday 23 June, hours before Camden ordered the night time evacuation of hundreds of families from the towers, which saw at least 100 people staying in the Swiss Cottage leisure centre overnight.

The panels on the Chalcots estate towers were among samples from 137 residential towers in 41 local authority areas that failed the government’s combustibility test. They are now being removed. The way the Grenfell Tower fire spread so rapidly across a cladding system using the same Reynobond PE panels installed under the auspices of Rydon is a central line of investigation in the police inquiry into the deaths of at least 80 people on 14 June.

A spokesman for Rydon declined to comment on the details of the dispute but confirmed a letter had been sent which stated that Rydon was satisfied it had met its obligations under the wider PFI contract, which involved ongoing maintenance.

A spokesman for Camden council said: “We can confirm that the council leader has received a letter from Rydon which has been passed to the borough solicitor. At this moment the leader and the resources of the council are fully focused on ensuring the safe return home of Chalcots estate residents.”

A source close to the leader added the letter was “not going to stop her speaking out on the important issue of cladding safety”.

The Chalcots cladding system used fire-resistant mineral wool insulation whereas Grenfell used more flammable Celotex material to improve the thermal performance.

It emerged on Wednesday that Camden had been told five years ago about concerns that some apartments in the Chalcot estate were not fitted with fire doors. A fire risk assessment commissioned by the council and seen by the Guardian concluded the doors would not provide residents with 30 minutes fire separation and recommended all apartment doors be replaced.

On Thursday Gould announced a new regime of fire testing and said the results would be published for residents to see “to ensure full transparency”.