A French designer is considering suing the UK government, claiming it used his work without payment on vans telling illegal immigrants to "go home".
Fabien Delage said he was in touch with the Home Office over the use of his font on the mobile billboards.
The Home Office said it was trying to contact the copyright owner to reach an agreement.
The Advertising Standards Authority is investigating the scheme, piloted in London, whose critics included Liberty.
Mr Delage said: "I've been contacted by the British Home Office and we're trying to solve this conflict. If the outcome is negative for me, I will consider to sue [sic] the British Home Office."
The Home Office is understood to have offered to pay Mr Delage but it remains unclear whether this will be sufficient.
A Home Office spokesman said: "We are seeking to contact the copyright owner in relation to the use of the font. It would not be appropriate to comment further at this stage."
The magazine Design Week first reported a claim that the Home Office had used Mr Delage's "Plane Crash" font on its vans without permission.
Mr Delage told the magazine: "My partners and customers now suspect I might have been involved in this campaign which, let me tell you, has been quite unpopular abroad.
"My fonts are free for personal use only, if you want to use them for work you have to purchase the licence on my website.
"I create typefaces and that's how I earn my living. I have absolutely no way to control who's using my fonts except for freelance artists that play the game, buy the licence online and get a licence agreement from me."
The vans, which were driven around London for a week in August, attracted criticism. Liberal Democrat Business Secretary Vince Cable called them "stupid and offensive" - but said he did not agree with claims that they were racist.
Liberty called the vans "deeply offensive", suggesting they had "racist connotations - mirroring National Front slogans from the 1970s".
In response, Liberty sent out its own vans bearing the slogan: "Stirring up tension and division in the UK illegally? Home Office, think again."
The Unite union also said it was seeking legal advice about whether the Home Office had "incited racial hatred" with the vans.
Immigration Minister Mark Harper defended the use of the vans, saying it was about "making it more difficult for people to live and work in the UK illegally".