The Duchess of York Sarah Ferguson is seeking £25m in damages from News UK over a 2010 undercover sting by the News of the World.
Details of her legal action follow the jailing of the reporter behind the story, Mazher Mahmood, for dishonesty in October.
The paper said at the time that it launched its investigation after being tipped off that Ferguson was “cashing in on unknowing Andrew [her ex husband Prince Andrew]” by setting up deals with foreign businessmen.
She met twice with undercover reporters, at a New York hotel and at Mosimann’s restaurant in London.
The NoW reported that she took $40,000 in cash while being secretly filmed. The paper reported that she could be heard on tape saying: “£500,000 when you can, to me, open doors”.
The paper said despite the prince knowing nothing about the deal, the Duchess claimed to have discussed it with him: “Andrew said to me, ‘Tell him £500,000’.
“He knows that he’s had to underwrite me up to now because I’ve got no money. So if you want to meet him in your business, look after me and he’ll look after you … you’ll get it back tenfold.”
At the time Fergeson responded to the story with a satement which said: “‘I very deeply regret the situation and the embarrassment caused. It is true that my financial situation is under stress. However, that is no excuse for a serious lapse in judgement and I am very sorry that this has happened.”
But in a legal claim reported by the Mail on Sunday, she said the News of the World invaded the Duchess’s privacy and “used deceit” to persuade her to make “unguarded statements to her detriment”.
She says the story caused her “serious embarrassment, humiliation, distress and reputational damage”, the Mail on Sunday reports.