Powell, who met Hill in Slade’s precursor The Vendors in 1963, accused his old friend of sending him a “cold email” saying he was no longer required.
And in a move echoing the bitter split in West Midlands reggae band UB40, Powell said he would be forming a rival Slade band taking on Hill’s line-up.
The move is the latest twist in the history of Slade, which has survived under various forms since its heyday in the 1970s.
Powell, 73, had been unable to play the drums for more than a year after snapping the tendons in both knees on his way home from a concert.
But he said he was now fully fit again and looking forward to playing his old favourites once more.
A statement on his website says: “Dave has sent Don a cold email to inform him that his services are no longer required, after working together and being friends since 1963.
“The great news is that Don is now fully fit to play drums again. He is coming back with his band who will be called Don Powell’s Slade.”
Powell, a former pupil of Etheridge Secondary Modern School and Wednesbury Technical College, joined The Vendors in the early 1960s.
Hill joined the Bilston-based band towards the end of 1963. The Vendors changed its name to the N’Betweens in 1966 and recruited violinist, bass guitarist and keyboard player Jim Lea through an audition.
Neville ‘Noddy’ Holder switched from a rival band, and after being rebranded as Slade, the four-piece group became one of the biggest names in glam rock in the 1970s.
Slade topped the singles charts six times from 1971 to 1973.
Coz I Luv You, Take Me Back ‘Ome, Mama We’re All Crazee Now, Cum On Feel the Noize and Skweeze Me, Pleeze Me all made No. 1, but the band is best remembered for the 1973 Christmas chart-topper Merry Xmas Everybody.
Holder and Lea left in 1992, but Powell and Hill relaunched the band the following year as Slade II, with bass player Craig Fenney, guitarist Steve Makin and lead vocalist Steve Whalley replacing their former bandmates.
The band reverted to being known as Slade 10 years later.
Powell, known to his fans as the ‘Bangin’ Man’, said he would continue to make music and was being joined by Fenney in his new band which would be known as Don Powell’s Slade.
He added that he was in the north-west of England recording a solo album at the moment.
He said he had also completed an album with another band, Don Powell’s Occasional Flames, which will be released this year.
“Don hopes that all his loyal fans will support his new ventures which he is very excited about,” said the statement.