Twitter has unveiled plans to tackle the increasing problem of cyber squatters setting up fake accounts on the hugely popular micro-blogging service.

Businesses and individuals that have delayed registering their brand name on Twitter have suffered reputation losses when cyber squatters appropriated their identities and made misleading posts.

The latest target is US baseball manager Tony La Russa of the St. Louis Cardinals, who filed a lawsuit in the Superior Court of California claiming damages as a result of a fake Twitter account.

A profile with his name on it had featured "derogatory and demeaning" statements that tarnished his reputation and caused him personal distress, he said.

Twitter has now said that it will experiment with a beta version of what it calls Verified Accounts on a "small set" of users. Official accounts will carry a tick symbol.

"Please note that this doesn't mean accounts without a verification seal are fake. The vast majority of Twitter accounts are not impersonators," said Twitter co-founder Biz Stone in a blog post. He also advised users to check the authenticity of contacts by visiting the official web site of a person for a link back to their Twitter account.

"The experiment will begin with public officials, public agencies, famous artists, athletes and other well known individuals at risk of impersonation," explained Stone.

Twitter struggles to take on new projects because it lacks a revenue model, and Stone mentioned this lack of resources as the reason why Verified Accounts had to be limited to just a few customers, and why it is not business ready. Stone hopes to verify more accounts in the future.

Stone also denied reports suggesting that La Russa and Twitter had reached a settlement, and that Twitter would pay La Russa's legal fees and make a donation to his Animal Rescue Foundation.

"There is a law against improperly using a person's name without authorisation and it was not authorised," La Russa is reported to have told Associated Press. "You can't sue everybody for criticising you, but it seemed like that was the perception. It was improper use of the name, but it's been settled."

However, Stone said that the reports are "erroneous".

"Twitter has not settled, nor do we plan to settle or pay," said Stone. " With due respect to the man and his notable work, Mr. La Russa's lawsuit was an unnecessary waste of judicial resources bordering on frivolous."

Stone added that the complaint had been taken care of by Twitter's support staff in a satisfactory way in line with the company's terms of service.

"We suspend, delete or transfer control of accounts known to be impersonation. When alerted, we took action in this regard on behalf of St. Louis Cardinals' manager," said Stone. "Twitter's terms of service are fair and we believe will be upheld in court that will ultimately dismiss Mr. La Russa's lawsuit."

Businesses currently suffering from impersonation attacks include retail giant Sainsbury's, which has a profile page on Twitter that is unlikely to be official. The location given is 'In ur fridge' and there has been only one update since July 2007.

South West Trains' Twitter account, meanwhile, reads: 'Not actually anything to do with SWT. Just a spiteful commuter playing around.' The page documents hiccups and delays in the train provider's service.