ASDA reported its worst quarterly sales performance in nearly a decade today as it launched a war of words against the "panic" promotional tactics of its rivals.

Like-for-like sales fell by 1.6 per cent in the third quarter to the end of September with the retailer warning that the turbulence stirred up by the supermarket price war would weigh on its performance for the next 12 months.

It was the first fall since a 0.1 per cent drop at the end of last year and the worst figure since at least the first quarter of 2006.

Chief executive Andy Clarke took aim at his competitors as he accused Yorkshire rival Morrisons of "printing £5 notes" with its voucher offers while describing Sainsbury's as a "business that has given up".

Asda, owned by US giant Walmart, has until now held firm while Tesco, Sainsbury's and Bradford-based Morrisons have plunged into worsening sales declines.

Earlier this year, Mr Clarke had boasted that they were scrambling to keep up as it took early action last year to protect its sales by lowering prices - but it has now also been dragged into the mire as the "big four" grocers are all squeezed.

Mr Clarke pointed out that despite the sales fall it had outperformed its major rivals and gained market share during the quarter, with its focus on "Everyday Low Price" rather than what he called "gimmicks".

He said: "The last quarter has seen a shockwave go through our industry and others are starting to respond to the challenges they face. I expect that we will see another tough quarter and I'm under no illusions that the battle will continue to rage.

"A new reality is upon us and although we were the first to adapt, we need to do everything to remain ahead of our traditional competitors while removing reasons for customers to go to the small discount shops.

"That's the strategy we are on and we need to keep accelerating it.

"We won't be knee-jerked into reacting to short term tactics. Vouchers can win quarters, but strategies win decades."

Mr Clarke said the market was likely to be "turbulent" for the next 12 months.

But he added: "We are not going to join the gimmick game for short-term sales wins. We are in the game for the long term."

Asda maintained it was one of the "winners" in the supermarket war, with discounters Aldi and Lidl and upmarket Waitrose, while its rivals among the big four were the "losers".