A statement by her solicitor, Anthony Julius, said the Princess was suing Express Newspapers and Express on Sunday editor Richard Addis over the story in Sunday's paper.
Mr Julius said: "A writ was issued today against the editor and publishers of the Express on Sunday and the Express. In it, the Princess of Wales claims damages for the alleged libel that, contrary to earlier press reports, she will benefit personally from the sale of a number of her dresses."
The Princess's office moved quickly to dismiss the story insisting all the money raised from the auction - expected to be between pounds 1m and pounds 4m - will go to charity. The auction house Christie's is due to announce details of the sale today including, it is thought, which of the Princess's ballgowns will feature in it.
Diana's senior financial manager Michael Gibbins said all the profits would be split between her favourite charities. "The entire proceeds will be divided equally between the Aids Crisis Trust and the Royal Marsden Cancer Research Fund," he said.
Dick Saunders, head of communications at the Express's parent United News and Media, said the company had no comment.Reuse content