Activist investor Pardus Capital Management called on Clearwire Corp to resume efforts to sell wireless airwaves in order to strengthen its hand in negotiations with majority owner Sprint Nextel.

The New York-based hedge fund also complained of what it sees as conflicts of interest on Clearwire's board that could adversely impact company decisions, in a letter addressed to Clearwire's chairman and interim chief executive, John Stanton.

Clearwire said it received the letter but declined to comment on shareholder interactions as a matter of policy. Sprint also declined to comment on the letter.

Pardus said in the letter, which it released on Wednesday, that Clearwire's decision -- announced May 4 -- to back away from an airwaves auction has put it in a weaker position in negotiations over a network sharing agreement with Sprint Nextel, which is also Clearwire's biggest customer.

Clearwire has had to slow the expansion of its high-speed wireless network due to a funding shortfall. It also pulled back on expansion of its retail stores to save money after a dispute with Sprint on the matter.

Both companies have been in talks about the possibility of sharing network towers and equipment so that Clearwire could expand its service without having to spend as much money.

But if it holds a spectrum sale process before sealing a network agreement, this would highlight the value of its spectrum and therefore help it in the negotiations, Pardus President Karim Samii said in the letter.

Pardus did not say how many Clearwire shares it owns. Holders of 5 percent of a company's shares are required by regulators to disclose their ownership.

An auction process could help demonstrate to Sprint that it needs Clearwire as much or more than Clearwire needs Sprint according to Samii.

He said he is also concerned that Stanton, who was nominated to Clearwire's board by Sprint, is also leading Clearwire's negotiations with the company.

While we do not doubt your personal integrity, the fact that you are both a Sprint-designee and primarily responsible for negotiating any network hosting deal with Sprint may leave the process susceptible to criticism, Samii said.

Of eleven directors Clearwire has up for election this year seven were nominated by Sprint, according to Clearwire's proxy filing ahead of its annual meeting scheduled for June 15.

Pardus suggested that Stanton should continue to lead the negotiations but that directors that were not nominated by Sprint should also form a negotiating committee to monitor the negotiations.

Pardus said it has owned Clearwire shares since last fall and has been increasing its position in the stock since then but it did not disclose the number of shares it owns.

Clearwire shares closed down 16 cents or 3.5 percent at $4.45 on the Nasdaq.

(Reporting by Sinead Carew; editing by Matthew Lewis)

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