Cycling: Nike deny $500,000 Lance Armstrong cover-up payment

Nike issued a denial last night to the extraordinary claim that it paid $500,000 (£300,000) for a failed drugs test from Lance Armstrong to be covered up.

Amid a growing backlash against the sportswear giant over its refusal to cut its ties with Armstrong, testimony that it had the money placed into a Swiss bank account belonging to former UCI president Hein Verbruggen re-emerged in a 2006 deposition from Kathy Lemond, the wife of Armstrong's compatriot cyclist Greg Lemond. The claim, which Lemond stood by in an interview with the New York Daily News, is that the cash was paid to cover up a positive test in 1999 for corticosteroids, which Armstrong had used to treat saddle sores.

Nike would not engage in discussion on the claim last night – instead issuing a 42-word statement. "In response to the offensive allegations in today's New York Daily News, Nike vehemently denies that it paid former UCI president Hein Verbruggen $500,000 to cover up a positive drug test," the statement read. "Nike does not condone the use of illegal performance enhancing drugs."

Lemond's claim surfaced during the legal case in which Armstrong and Tailwind Sports – the company which runs his cycling team – filed a lawsuit against SCA, a Dallas firm that indemnifies sponsors who offer prizes based on athletic achievements. SCA refused to pay Armstrong a $5m bonus that Tailwind had promised the cyclist for winning the 2004 Tour de France after allegations of doping reported in the book by Sunday Times journalist David Walsh and Pierre Ballester – LA Confidential – the Secrets of Lance Armstrong. It was in a 2006 deposition over the suit, that Lemond testified that Julian Devries, who worked as a mechanic for Armstrong's team, told her that Nike and Thom Weisel, a banker who sponsored Armstrong's team, paid the money into Verbruggen's account.

Lemond told the Daily News that she stood by her testimony. She said: "I'm sure Julian was telling the truth."

Armstrong's lawyer Mark Fabiani responded with a strong personal attack on Lemond. "We have absolutely no idea what Mrs Lemond, a long-time Lance-hater, was talking about when she gave her deposition. And to this day we have no idea what she was talking about," he said.

Armstrong's years of drug-taking was revealed last week in the United States Anti-Doping Agency's report into his alleged doping in the US Postal team. Nike have shown no signs of hardening their stance on Armstrong and, amid protests in the US, have only reissued a statement from August relating to the seven-times Tour de France winner. "We are saddened that Lance Armstrong may no longer be able to participate in certain competitions and his titles appear to be impacted," that statement read. "Lance has stated his innocence and has been unwavering on this position. Nike plans to continue to support Lance and the Lance Armstrong Foundation."

Lemond's Twitter account yesterday revealed her attempts to generate support for a protest against Nike's stance, planned for the company's corporate headquarters in Beaverton, Oregon.

American rider Levi Leipheimer has been sacked by Omega Pharma-QuickStep after admitting to doping while a team-mate of Armstrong.