A public interest group on Monday accused media giant Clear Channel Communications Inc. of stifling speech by reneging on a contract to post an antiwar billboard in the heart of Times Square during the Republican National Convention in August.

In a lawsuit filed in federal court here, the Berkeley-based Project Billboard said Clear Channel, a company whose leaders have been strong supporters of the Bush administration, had breached a contract to put up the highly visible billboard that depicted a bomb with the words "Democracy Is Best Taught by Example, Not by War."

Clear Channel Outdoor, the division that controls the company's billboard leasing, rejected the ad, calling it "distasteful" and "politically charged," according to an e-mail the company sent to Project Billboard. After negotiations over the imagery, Project Billboard offered to replace the bomb with a dove but still failed to win approval.

"The billboard was meant to be provocative," said Deborah Rappaport, director of Project Billboard. "Our intent is to increase the amount and level of discourse on one of the most important issues facing the nation."

The group paid Clear Channel $368,000 to lease the billboard space mounted on the facade of the Marriott Marquis Hotel, which has the potential of reaching millions of people.

Clear Channel controls about one-half of the billboards in Times Square, where about 50 "supersigns" flash, scroll and blink in a dizzying display of fashion, flesh and liquor. According to the contract, Clear Channel can reject ad copy that is deemed "obscene" or "false" or that "violates laws" or is "offensive to the moral standards of the community."

The company rejected the ad, said Paul Meyer, president and chief executive of Clear Channel Outdoor, after concluding issues of terrorism and war were too sensitive for New Yorkers after the Sept. 11, 2001, terrorist attacks.

"It's not the message; it was the imagery," Meyer said. "In the city of New York, at the current time, bomb imagery is inappropriate."

Project Billboard argued the company has taken issue with the political nature of the ad. A revised version presented by the media company omitted the mention of war and replaced the dove with an image of a flag-waving girl, according to the advocacy group.

Clear Channel's corporate leadership has a history of political activism on behalf of Republicans. Tom Hicks, a major shareholder and former member of the company's board, purchased the Texas Rangers from George W. Bush in 1998 and contributed to his campaigns. Company employees have given $382,000 to Republicans in the current election cycle, according to the Center for Responsive Politics.

The company has previously been accused of using its media outlets to assist the GOP. Some company radio stations banned the Dixie Chicks from their programming after the group's lead singer, Natalie Maines, criticized Bush. Shock-jock Howard Stern accused Clear Channel of dropping his show in retaliation for anti-Bush rhetoric.

New York's Times Square bombards passersby with large-scale advertising full of fashion, flesh and liquor.This is the proposed ad that Clear Channel called "distasteful."