But Sting denied the claim by Nicholas Purnell QC, for the defence. "I'm a generous man, sir, but not that generous," he said.
Sting was giving evidence at Southwark Crown Court, central London, for the third day against his former accountant, Keith Moore, who is accused of stealing pounds 6m from him.
Mr Moore, of Fulham, south-west London, who denies 15 sample counts of theft, lost most of the money in a series of speculative ventures, the court has been told.
Mr Purnell claimed Sting made the offer at his beach house in Malibu, California, in 1991, where he had invited Mr Moore and his fiancee to join him and his wife Trudi to discuss the purchase of a house.
"It's a memorable occasion for Mr Moore because you gave him a seaweed milkshake for lunch," Mr Purnell said.
He said Mr Moore had been pursuing Sting's recording company, A&M Records, for not honouring their contractual obligations over payment of royalties for music he had recorded with the rock group Police and as a solo artist - an action that was settled when the company paid the star $24m.
"Mr Moore told you that his present calculation about the A&M settlement was that it was in the region of $10m,'' Mr Purnell said. "You were pleasantly astonished and surprised.
"You said, `If this is achieved satisfactorily, there'll be a decent fee in it for you'." But Sting replied: "Mr Moore was being paid very well, at least pounds 800,000 a year. I would not have thought I would have had to pay him a commission. That was never suggested in all our years."
The singer said he did not remember the meeting. But Mr Purnell said Mr Moore had mentioned that he was in difficulty with a tax bill and had suggested Sting might pay it if he wished to show his appreciation. The court has previously been told Mr Moore and his partner narrowly avoided being forced into bankruptcy when a cheque from Sting arrived at the High Court to settle an unpaid Inland Revenue bill of pounds 691,871.
Sting claimed he remembered signing the authorisation to pay the bill but that he thought nothing of it. "I've paid about pounds 20m in tax over the last 15 years. This wasn't remarkable at all," he said. "Lending Mr Moore pounds 691,000 would be very remarkable and I would remember it."
But Mr Purnell said Sting had not had to sign a tax bill for the previous four years since setting up a mandate authorising Mr Moore to do it for him.
Earlier Sting spoke of an anonymous letter telling him that Mr Moore stole money from him to buy a house for his girlfriend. The court has been told pounds 20,000 was used to buy the leasehold interest of a house in South Kensington, central London. Sting insisted Mr Moore had never told him about the property investments.
Mr Purnell put it to Sting that his solicitors and accountants suggested trying to recoup the missing millions from Coutts, the bank which supplied most of the money. Mr Purnell said Coutts Bank had settled the star's claim against them without any admission of liability. Their defence had been that he had authorised Mr Moore to carry out his banking affairs on his behalf. The court has been told Coutts paid back pounds 4.8m allegedly stolen by Moore. Judge Gerald Butler QC asked: "Is it right they eventually paid up?"
"Every penny, and interest," the singer replied.
The trial continues.