KwaZulu-Natal Premier Sibusiso Ndebele has threatened to sue former premier and IFP leader Lionel Mtshali.
This comes after Mtshali accused Ndebele of using the public office to enrich himself.
Mtshali said Ndebele owned and ran businesses at the people's expense.
He said the IFP was aware that Ndebele had business interests in the province that could constitute a direct conflict of interests.
Mtshali said Ndebele owned mushroom and rice farms and traded in Nguni cows. He said the businesses are meant to benefit poor communities, but Ndebele uses them for personal gain.
An incensed Ndebele has dismissed the accusations as "pathetic".
He said the claims are an "attempt to seek attention from the media. Mtshali's statement is nonsensical and devoid of any truth".
Ndebele said: "He has nothing to offer the people in the province so he spreads lies to attract publicity."
He said Mtshali's behaviour was all the more improper because this was his second derogatory statement in less than three days. He said at the weekend that Mtshali claimed that the premier's life is dependent on former KwaZulu-Natal police who are loyal to Mtshali.
"It was a reckless statement and the provincial police commissioner is investigating. Action will be taken in this regard," he said.
About his alleged businesses, Ndebele said: "This is defamatory because I have no business in my name. If there are, there would be nothing wrong, but it is not the truth. The law requires that businesses be declared to avoid conflict of interests and I am not immune to that."
He denied having mushroom or rice businesses.
"I have no Nguni cattle linked to government and have absolutely no Rainbow Chicken franchise."
A defamation order will be served soon.
Mtshali said the IFP accepts the legal challenge about the Ndebele family business operations.
"We only wish to remind him that he is a public figure and by taking the legal route he will put on trial the entire provincial government.
"This extraordinary eruption of bile says even more about the Ndebele's style of governing since 2004 than it does about its substance, which is a worrying lack of transparency," he said.