Kelly Fisher, 31, appeared at a press conference in Beverly Hills wearing an enormous sapphire and diamond ring on the fourth finger of her left hand and brushing away tears. Accompanied by her lawyer, Gloria Allred, she claimed Mr Fayed bought the ring and that he had promised to marry her and buy her a house in Malibu.
Reading from a prepared statement, Ms Allred said that Mr Fayed, 41, "led her emotionally all the way up to the altar and abandoned her when they were almost there. He threw her love away in a callous way with no regard for her whatsoever".
Mr Fayed allegedly told Ms Fisher that he had bought a home in Paradise Cove, an exclusive Malibu neighbourhood near Los Angeles, for the two of them to live in, and told her to start shopping for furnishings.
Ms Allred said: "To compound matters, Miss Fisher learnt about Mr Fayed's betrayal, not from Mr Fayed but instead from the `kiss photo' that was published and circulated around the world to Miss Fisher's utter dismay, shock and shame."
She said that at the time Mr Fayed was photographed with the Princess on the Fayed's yacht, the Jonikal, in the Mediterranean, Ms Fisher was staying nearby on another Fayed yacht. When she tried to contact him recently she was told not to call again.
"We are going public because we care about Princess Diana and her future. We would like the Princess, who has suffered greatly in the past, to know about Miss Fisher's experiences with Mr Fayed so she can make an informed decision regarding her future and that of her children." Ms Fisher would be willing to meet the Princess anywhere in the world on a confidential basis to pass on a "great deal of information" about Mr Fayed that was not being made public at this time, she added.
Ms Allred said she had filed a breach-of-contract suit in Santa Monica Superior Court contending that Mr Fayed wanted the model, who has appeared on the covers of Elle, W and other magazines, to "put her career in second place behind him and to spend more time with him and less on her modelling career".
Ms Fisher broke down in tears when her mother, Judith Dunaway, said: "No one's daughter deserves to be treated as my daughter has been treated.
"I can only say that I am terribly upset by the way Dodi Fayed has treated my daughter. During the course of their relationship Dodi telephoned me frequently to tell me how much he loved Kelly, to discuss plans for their future."
However, a spokesman for Harrods, which is owned by Dodi's father, Mohamed al-Fayed, dismissed the claims. Michael Cole said: "We are content to leave it to the good sense of the British and American people to judge this development for what it is."Reuse content