The Duchess of York is "regretful" and "devastated by the situation" after she was filmed apparently offering to sell access to her ex-husband Prince Andrew for £500,000, her spokeswoman said today.
A News of the World video showed Sarah Ferguson promising to introduce an undercover reporter posing as a wealthy businessman to the Prince, who has been the UK's special representative for international trade and investment since 2001.
The Duchess is expected in Los Angeles later today where she is scheduled to pick up an award for her charity work.
It is believed she has not spoken to her ex-husband since the story came out as he is on a flight back to the UK from Asia where he was on official business.
In the film on the newspaper's website, she is shown telling the reporter: "£500,000 when you can, to me, open doors."
Asked if she was referring to the Prince, she said "Yeah", then shook hands with the reporter before apparently accepting a 40,000 US dollar (£27,600) cash down-payment.
She was filmed apparently telling him how to transfer £500,000 to her bank account, saying: "Then that, is then like, then you open up all the channels whatever you need, whatever you want, and then that's what and then you meet Andrew and that's fine. And that's, that's when you really open up whatever you want."
The Duchess was filmed explaining how the Prince meets the "the most amazing people" in his role as special representative, but insisted he "is completely whiter than white".
In one scene from the film, the Duchess is shown sitting in front of a table with a large amount of cash laid out on it.
The paper said despite the Prince knowing nothing about the deal, the Duchess claimed to have discussed it with him, saying: "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."
Rumours of money troubles have dogged the Duchess of York since her divorce from Prince Andrew and have gathered pace recently.
Only last month it emerged she was facing legal action from a leading law firm over a substantial unpaid bill thought to be as much as £100,000.
Last year, it was claimed her plans to celebrate her 50th birthday had been scaled down because of money concerns.
The week before her birthday it emerged the New York-based company Hartmoor LLC, set up to manage her US career in publishing, public speaking and media work, was expected to close with debts of around £600,000.
Forging a career for herself outside "the firm" - as the monarchy is sometimes known - has been a difficult task, but the former royal carved out a niche for herself as a children's author and charitable activist.
In 1993 she founded Children in Crisis, an organisation which helps educate youngsters around the world, and is patron of a range of charities including the Teenage Cancer Trust.
Tonight she is expected to pick up an award for her work with underprivileged children at an awards ceremony organised by children's charity Variety.
The Duke and Duchess of York divorced in 1996 but have remained close friends.
A Buckingham Palace spokeswoman said they would not comment on the allegations.