Duchess of York brings £25m suit against ex-News of the World staff over Fake Sheikh story

The Duchess of York has allegedly brought a £25m ($30.9m) lawsuit against Rupert Murdoch's News Group Newspapers over a story by Mazher Mahmood – the infamous 'Fake Sheikh' – that accused her of asking for cash in return for access to her ex-husband, Prince Andrew.

Sarah Ferguson claims the story, which was printed in the now-defunct News of the World in 2010, caused her to lose earnings amounting up to £25m and that she had been tricked by undercover reporter Mahmood.

In the report, the now-disgraced investigative reporter Mahmood posed as a businessman during a meeting with Ferguson, where the pair discussed Prince Andrew. However, lawyers for both Ferguson and the newspaper claim the other side introduced the topic of Ferguson arranging a meeting with the prince.

Ferguson was left red-faced after the Sunday newspaper released footage of her offering to introduce Mahmood to her ex-husband Prince Andrew in return for £500,000.

Ferguson claimed the News of the World published the conversation out of context.

Mahmood is currently serving a prison sentence, after being found guilty of tampering with evidence in the trial of singer Tulisa Contostavlos, which collapsed in 2014.

Ferguson's lawsuit, which names former News of the World editor Colin Myler, former News International legal affairs manager Tom Crone and News Group Newspapers as defendants, states the report caused her "serious embarrassment, humiliation, distress and reputational damage", the Daily Mail reports.

News Group Newspapers (NGN), which owned the News of the World before the newspaper was closed in 2011 following a phone-hacking scandal, argued in a defence document that the story was true and in the public interest.

The document, seen by the Daily Mail, said: "The Duchess represented to a previously unknown person that commercial favours and inside information could be bought from a member of the Royal Family, and the role of a UK ambassador for trade could be turned to account for private profit, provided the price was right and the money went to her and not the Duke of York."

News Group Newspapers publishes The Sun newspaper. It is a subsidiary of Rupert Murdoch's News UK Ltd operation.