Telstra is warning the forced appointment of former federal government spin doctor Geoff Cousins to the company's board could affect the sell-off of the government's final stake in the telco.
The communications executive will likely be appointed in November to the Telstra board despite Telstra's protestations.
On Monday, an unprecedented public brawl broke out between the government and the company over Mr Cousins' appointment.
Telstra chief executive Sol Trujillo vowed to oppose the move and told shareholders to vote against it at the annual general meeting later this year.
He said the board did not have time to assess Mr Cousins's application and ensure he passed strict independence requirements.
The government, which owns 51.8 per cent of Telstra, plans to sell up to $8 billion worth of shares in the next few months.
The remainder of its stake will be put into the Future Fund - a government piggy bank to pay public servant superannuation - to be sold down over time.
Prime Minister John Howard hit back at Telstra, telling it the appointment of Mr Cousins would go ahead regardless of the board's objections.
But Mr Trujillo warned the appointment could affect the sale.
I think it raises a lot of questions in the eyes of many investors, as well as potential investors, and it's unfortunate this has happened this way, he said.