Britain's Duchess of York apologizes after paper sting

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Britain's Duchess of York has apologized for a "serious lapse in judgment" after she was caught in a newspaper sting apparently offering access to ex-husband Prince Andrew in exchange for cash.

Sarah Ferguson also admitted Sunday having financial problems after she appeared to agree to be paid 500,000 pounds by a journalist posing as a businessman, in a video that was secretly filmed by the News of the World.

In return for the money, the paper said she promised to introduce the undercover reporter to the prince, who is Queen Elizabeth II's second son and Britain's special representative for international trade and investment.

As well as making the deal for half a million pounds the equivalent of 575,000 euros or US$723,000 the footage also showed Ferguson sitting in front of a pile of cash apparently handed to her as an advance payment.

After the publication of the report Sunday, the duchess issued an apology for her actions and said the prince had not been aware of the meetings. In the video, Ferguson had suggested the prince knew about the discussions.

"I very deeply regret the situation and the embarrassment caused," she said in a statement.

"It is true that my financial situation is under stress, however, that is no excuse for a serious lapse in judgment and I am very sorry that this has happened."

"I am sincerely sorry for my actions," she added.

Ferguson said that the prince was "not aware or involved in any of the discussions that occurred."

In a separate statement Sunday, a spokesman for Buckingham Palace said the prince, the Duke of York, "categorically" denied having any knowledge of the meeting between his ex-wife and the undercover reporter.

In the video, Ferguson is filmed saying: "500,000 pounds to me, when you can... 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 (27,600 pounds, 32,000 euros) cash down payment.

The newspaper said the prince knew nothing about it. But the video showed Ferguson saying she had discussed the deal with her former husband, telling the reporter: "Andrew said to me, "˜Tell him 500,000 pounds'.

"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," she added.

The couple divorced in 1996 but have remained close friends. According to the paper, the duchess said of their relationship: "We're the happiest divorced couple in the world."

The paper reported the 50-year-old duchess met the fake businessman on two occasions first at a New York hotel and then at the exclusive Mosimann's dining club in London.

It said she was then chauffeured with the reporter to a flat where she was shown on the video apparently shaking on a deal to introduce him to her former husband.

Since Ferguson and the prince separated, she has been dogged by rumors of money troubles which have recently escalated.

It emerged last month she was facing legal action from a law firm over an unpaid bill thought to be as much as 100,000 pounds. Last year her plans to celebrate her 50th birthday were reportedly scaled down due to money concerns.

A company set up in the United States to manage her career there in publishing, public speaking and media work is also expected to close with debts of more than half a million pounds.

Ferguson faced a tough task to build herself a career outside Britain's royal family, but managed to carve a niche as a children's author and charity activist.

In 1993, she founded Children in Crisis, an organization which helps educate youngsters around the world and is a patron of other charities.

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