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Clara Peller found the beef, but she lost her bread and butter Friday.

The Wendy`s hamburger chain announced that it will no longer use the Chicago star of its ”Where`s the beef?” commercials because Peller proclaims, ”I found it, I really found it. Boy, did I find it!” in a commercial for Prego spaghetti sauce now being aired on prime-time television. ”We believe the commercial affects her credibility because she can only find the beef in one place, Wendy`s,” said Dennis Lynch, vice president of communications at Wendy`s headquarters in Dublin, Ohio.

But Peller and her attorney said Friday that the spaghetti sauce is not the real bone of contention.

”She was gonna sue them,” said Peller`s Chicago attorney, Joel Weisman. ”We really think this is a pre-emptive strike against the lawsuit.”

Weisman charged that Wendy`s used Peller`s picture without permission on billboards in Chicago and on masks handed out at a Denver Broncos football game last fall. When legal action was threatened, Wendy`s offered to sign Peller to a three-year contract, the attorney said.

”We started negotiations last August, but they kept interrupting or delaying them,” Weisman said. ”The negotiations were sputtering, we had no reason to think they would be fruitful. . . . She decided to go work elsewhere, which she is free to do.”

The feisty actress charged in a press release Friday that her ads for the spaghetti sauce did not affect her ability to represent Wendy`s.

” `Wendy`s` charge that I am no longer credible because I found beef in Prego spaghetti sauce is what is not credible,” she said in a press release Friday. ”I may be an old lady, but I am not senile.”

Nor is she bound for the bread line, according to the Wendy`s spokesman.

”She made over $500,000 last year from Wendy`s alone,” Lynch said.

”They say we owe them more money. We say we paid for those services.”

Peller, who is believed to be in her 80s, has scheduled a press conference for Saturday morning. The pint-sized woman with the 55-gallon drum of a voice was a Hyde Park manicurist when Chicago director Joe Sedelmaier discovered her eight years ago. Peller`s spunky manner and husky voice inspired the successful director to cast her in 10 Wendy`s commercials–and others for Jartran Truck Rental and Mr. Coffee.

The ”Where`s the beef?” spot made the Hyde Park grandmother a cult figure and highly prized spokeswoman. Wendy`s officials credited her with helping increase corporate profits by 24 percent, to $68.7 million, last year. ”All of us at Wendy`s are saddened,” said Lynch, who traveled with Peller on promotional tours. ”I developed a personal relationship wih her. I love her like my own grandmother. Since I can`t talk to her (because of the controversy), please tell her I love her.”

But even close friends can be fickle along Madison Avenue: Lynch`s lost love may make gravy for the Campbell`s Soup Co., which markets Prego spaghetti sauce.

”I can`t deny that (the publicity) is a boon for us,” said Kathleen MacDonnell, marketing manager for Prego. ”We have an open-ended contract with Clara and we are very happy we`ve got her.”

And that`s no bouillon.