UPDATE 1-IAC calls Liberty Media action preposterous

(Adds more details from statement, background)

NEW YORK, Jan 29 (Reuters) - IAC/InterActiveCorp (IACI.O: Quote, Profile, Research, Stock Buzz) on Tuesday called a move by John Malone's Liberty Media Corp (LINTA.O: Quote, Profile, Research, Stock Buzz) to take control of the Internet conglomerate "preposterous" and "a desperate sideshow."

The statement came after Liberty on Monday asked a court to uphold the removal of IAC Chairman Barry Diller, his wife Diane Von Furstenberg, Edgar Bronfman Jr., Victor Kaufman, Arthur Martinez, Steven Rattner and Alan Spoon from the IAC board.

Liberty accused those board members of breaching their fiduciary duty with a plan to dilute Liberty's voting control over IAC's businesses in a proposed spin-off of four of its largest units. Liberty owns nearly 30 percent of IAC, but has almost 62 percent voting control.

"Liberty has now gone off the deep end, not only alleging that Mr. Diller has somehow materially breached his proxy by which he has voted Liberty's IAC shares for over 12 years, but also purporting to unilaterally throw out the incumbent directors and installing its own slate," IAC said.

Tensions between Liberty Chairman John Malone and Diller, the media veteran who is also IAC's chief executive, became public last week. At issue is a plan to spin off IAC's HSN shopping network, Ticketmaster box office service, Interval time-share exchange and LendingTree mortgage service.

Liberty initially approved the plan in November after expressing mounting frustration over IAC's share performance. But Malone raised objections earlier this month when Diller proposed a single-tier share structure for the spun-off units that would dilute Liberty's control.

Diller last week asked a Delaware court to uphold his long-held right to vote Liberty shares in favor of the single-tier share system, despite Malone's opposition.

Liberty fought back in a countersuit that accused Diller and his close associates on IAC's board of staging a "corporate coup" to wrest control away from Liberty.