Phorm is on the defensive again. This morning, we got this statement: “There is no substance to today’s New Media Age story. Over the last year there have been continuous attempts to create the illusion that Phorm’s ISP partners are parting ways with the company. This is yet another example of such a story, which has no basis in fact.”

What story? NMA had reported potential Phorm trialist Virgin Media (NSDQ: VMED) confirming it’s talking with behavioural ad targeting rival Audience Science, and an anonymous Virgin “source” as saying the ISP “wouldn’t be going ahead with” Phorm. The mag also says BT (NYSE: BT) is taking ad networks’ views about its Phorm trial, suggesting - albeit with no citation - the ISPs are “seeking alternatives”. Both denied by Phorm.

Virgin is on record as being on the fence. Despite being one of three ISPs to sign its initial interest, CEO Neil Berkett told a November investors’ conference in New York: “Our next initiative probably won’t be with the Phorms of the world” - it’s Phorm launch is “if”, not “when”. Phorm CEO Kent Ertugrul (pictured) in February said BT will “most definitely” launch Phorm in full this year; little word from BT.

Phorm tabled a press conference on Tuesday but canceled, preferring a statement, which has not yet appeared. The company wants to help publishers profit from more highly targeted ads by sitting on ISP networks to anonymously gather and profile a user’s every web visit. Whilst earlier skepticism came only from digital liberties quarters, as it now tries to build its business Phorm is taking a material pounding - the European Commission has said the UK government erred when it gave Phorm an effective green light and has ordered laws be changed, while Wikipedia has joined Amazon (NSDQ: AMZN) in asking Phorm not to record visits by their users. If more sites pull out, gaps open up in the proposition.

It’s a PR nightmare for Phorm, with every new statement walking a tightrope between debunking perceived myth and fanning the flames still further. But at stake is the kind of profit struggling online publishers, too, can make - and we don’t think this story is quite over yet.

Update: MPs announced an investigation in to internet traffic snooping and bandwidth throttling. Via Register.

• BT Will ‘Definitely’ Go Live With Phorm This Year, Phorm Says
• Virgin-Phorm Deal Remains Uncertain; It’s ‘If’, Not ‘When’
• BT, TalkTalk, And Virgin Media Sign With Phorm; Orange Ad Network Regroups