Colligan thought the suggestion of a truce wrong and "likely illegal" according to their June 2007 communications, which have only now been revealed.

Palm hired a former Apple executive, Jon Rubinstein, to develop new smart phones, shortly after Apple introduced the first generation iPhone, a move which did not sit well with Jobs.

"We must do whatever we can to stop this," Jobs told Colligan, reportedly adding that Apple had patents and more money than Palm if the companies ended up in a legal fight over poaching senior staff.

Responding to Jobs demands the Palm CEO said: ""Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal."

Both Apple and Palm remained tight-lipped when Bloomberg contacted them for comment.