An ongoing feud between Telstra and local councils over new, 2.7-metre tall phone booths is set to head to the Federal Court tomorrow.

Telstra wants to renovate more than 1800 payphones by installing large LCD advertising screens, Wi-Fi, phone charging ports and other features.

City councils, including Sydney, Melbourne and Brisbane are not enamoured of the hi-tech renos, calling them a Trojan horse for advertising and a public nuisance.

Telstra has more than 16,000 payphones across Australia, which are used to make 13 million calls a year.