The industry body representing Australian woolgrowers has filed a lawsuit against animal welfare group People for the Ethical Treatment of Animals (PETA) in an attempt to stop a boycott of Australian wool.

Australian Wool Innovation (AWI) said it had filed two claims in the Federal Court to prevent PETA from threatening clothing retailers who use wool sourced in Australia.

PETA is opposed to live sheep exports and a practice known as mulesing, where loose flesh is cut from a lamb's hindquarters to prevent blowfly strike.

AWI says that PETA is breaking the regulations of the Trade Practices Act with its current campaign.

The Australian Wool Industry held an emergency meeting on Monday in which it agreed to phase out mulesing by 2010.

But PETA says there are proven alternatives to this practise and will not stop campaigning for a total boycott of Australian wool products unless it is stopped immediately.

Trendy US clothing company Abercrombie and Fitch has already banned the use of Australian merino wool in its garments, and endorsed PETA's campaigns after the welfare group threatened to make it one of its targets.

Another international clothing company is expected to ban Australian wool in the next two weeks.