Updated from 11:35 a.m.

Book publishers sued Google ( GOOG), escalating a nasty spat over the search-engine giant's ambitious book-indexing project.

The Association of American Publishers said it sued the Mountain View, Calif., Internet giant Wednesday morning after talks broke down. The suit seeks a declaration by the court that Google commits infringement when it scans entire books covered by copyright, and a court order preventing it from doing so without permission of copyright owners. Google has said its book-indexing plans are covered by the so-called fair use doctrine.

Plaintiffs include McGraw-Hill ( MHP), Pearson ( PSO) and its Penguin Group USA, Viacom's ( VIAB) Simon & Schuster and John Wiley & Sons ( JWB).

"The publishing industry is united behind this lawsuit against Google and united in the fight to defend their rights," said AAP President Patricia Schroeder. "While authors and publishers know how useful Google's search engine can be and think the Print Library could be an excellent resource, the bottom line is that under its current plan Google is seeking to make millions of dollars by freeloading on the talent and property of authors and publishers."

Wednesday afternoon, Google fired back at the publishers, saying, "This short-sighted attempt to block Google Print works counter to the interests of not just the world's readers, but also the world's authors and publishers."

The publishers are only the latest group to weigh in against Google's print plans. Two weeks ago Sunnyvale, Calif., rival Yahoo! ( YHOO) announced an alliance that will seek authorization from copyright holders to use their material -- the very thing Google has said it doesn't need to do. And content scanned through the Yahoo! project will be available on all search engines, in contrast to Google's Print initiative, whose content will be found only on Google.

On Wednesday, the publishers said they had proposed that Google use the ISBN numbering system to identify works under copyright and secure permission from publishers and authors. "Google flatly rejected this reasonable proposal," the publishers said, adding, "Google left our members no choice but to file this suit."

The comments come a day after Google chief Eric Schmidt defended the indexing project, called the Google Print Library Project, in an op-ed column in The Wall Street Journal.

"The program's critics maintain that any use of their books requires their permission," he wrote. "We have the utmost respect for the intellectual and creative effort that lies behind every grant of copyright. Copyright law, however, is all about which uses require permission and which don't; and we believe (and have structured Google Print to ensure) that the use we make of books we scan through the Library Project is consistent with the Copyright Act, whose 'fair use' balancing of the rights of copyright-holders with the public benefits of free expression and innovation allows a wide range of activity, from book quotations in reviews to parodies of pop songs -- all without copyright-holder permission."

Last month, some writers accused Google of "massive copyright infringement" for its plans to scan and copy books, according to a statement posted on the Web site of the Authors Guild. Former New York Times editorial writer Herbert Mitgang, children's book author Betty Miles and poet and critic Daniel Hoffman were also named as parties to the suit.

Google investors, awaiting word after the close Thursday on Google's third-quarter earnings, shrugged off the latest salvo, sending the stock up $3.78 to $307.06.