GaGa sparked controversy after sitting in a wheelchair and donning a black mermaid costume while singing 'You and I' during her secret gig in Sydney last week.
Midler wrote on Twitter: "I'm not sure Lady Gaga knows that I've performed my mermaid in a wheelchair for millions of people - and many of them are still alive… Dear Lady Gaga if you think a mermaid in a wheelchair seems familiar - it's because it is! You can see it on youtube 24/7 - with ME performing it. (sic)"
She added: "Dear Lady Gaga I've been doing singing mermaid in a wheelchair since 1980 - You can keep the meat dress and the firecracker t**s - mermaid's mine."
However, Midler seemed to soften her stance against GaGa later, teasing: "Fabulous mermaids can coexist!"
GaGa's decision to perform in a wheelchair also drew objections from US disability campaigners, who claimed that the stunt was discouraging to the disabled.
Last week, GaGa's official website was hacked, leading to thousands of fans' personal information being stolen.
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Watch both Lady GaGa and Bette Midler perform their wheelchair stage routines below: