The company that currently manufactures UK passports is to challenge the British government's decision to award the contract for post-Brexit passports to a Franco-Dutch firm.
British passports are set to revert from burgundy - which is used by most EU countries - to blue once the UK leaves the EU, in a move officials claimed will 'symbolise our national identity'.
De La Rue has produced British passports for the last decade, but announced last month that it had been told it has not won a bid to produce the post-Brexit travel document.
It has been widely reported in British media that Franco-Dutch firm Gemalto has won the £490m (€560m) contract, with a suggestion the documents would be produced in France.
The reports provoked strong criticism from Brexit supporters, while the Labour party described the decision as a 'total farce'.
While the successful firm has not been formally named by the British government, the Home Office confirmed a 'preferred bidder' had been chosen.
Officials have claimed it will save British taxpayers around £120 million (€137 million) over five years.
In a statement, a De La Rue spokesperson confirmed they are beginning appeal proceedings against the decision.
The statement argues: "Based on our knowledge of the market, it's our view that ours was the highest quality and technically most secure bid.
"We can accept that we weren't the cheapest, even if our tender represented a significant discount on the current price. It has also been suggested that the winning bid was well below our cost price, which causes us to question how sustainable it is."
It adds: "In the light of this, we are confident that we remain the best and securest option in the national interest."
The UK first used a blue design in 1921, before changing to the voluntary EU standard of burgundy in 1988.