Mr Tweed (pictured) said his client appreciated the “comprehensive and categoric” retraction and apology published by the National Enquirer.

The disputed story was headlined Fergie demands $$ to dish on Diana.

It alleged that the Duchess was willing to give an interview about her friendship with the late Princess of Wales for financial reward.

Confirming the settlement, Mr Tweed said he would continue inquiries aimed at identifying the source of other false information about his client.