The decision coincides with Grey's involvement in the BSkyB review, which includes the Sky Broadband business.
An AOL source said the company was uncomfortable with the fact that Grey was pitching for Sky's account. However, an AOL spokesman denied notice had been served as a result of Grey breaching its contract by participating in the pitch.
The move follows the sale of AOL's access business to the Carphone Warehouse in a £370m deal. That portion of the business, including broadband subscription drives, is expected to be handed to Clemmow Hornby Inge when the deal is completed in December.
AOL UK, meanwhile, will hold a pitch for its UK web portal business.
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