The company at the centre of the clinical waste disposal scandal is to take legal action against 17 NHS trusts.
Healthcare Environmental Services (HES) said it would seek £15m for unlawful termination of its contracts.
Last month, the company was embroiled in a row about claims that hospital waste including body parts had been stockpiled and not disposed of in line with legal requirements.
The company complained that there was a lack of incineration capacity in the UK, but the trusts removed it from contracts and the Government handed them to Mitie.
HES managing director Garry Pettigrew said: “We feel that we have been left with no choice but to take legal action against the trusts after the terms of the agreed contracts were broken.
“Our contracts were terminated without first discussing any performance issues with the company and we were given no opportunity to fulfil our obligations.
“We are now taking this action to safeguard the company and our employees’ future, and to give us an opportunity to correct some of the misinformation that has been reported in the media.”
The company said that, since January, it had sought a dispensation to continue the safe storage of medical waste above agreed limits so it could carry out safe disposal in a planned and phased programme.
It said: “This situation had been caused by a proven lack of high-temperature incineration capacity in the UK, combined with the pressure on NHS trusts not to send waste to landfill, and it is affecting all medical waste contractors.”
Health minister Stephen Barclay said last month that the clinical waste concerned was stored securely but was not being processed and disposed of within required time limits.
He said NHS Improvement wrote to HES giving it 48 hours to provide evidence that it was operating within legal limits. It concluded that HES was not and served contract termination notices covering 15 trusts.
Barclay said: “The Environment Agency is taking enforcement action against HES to clear the excess waste from its sites and bring the company back into compliance within its permits.”
Both the EA and Department for Health and Social Care have said there is ample incineration capacity for clinical waste.