Duchess of York apologizes over newspaper sting

Britain's Duchess of York Sarah Ferguson poses for photographers at her arrival for the premiere of ''Young Victoria'' by Canadian director Jean-Marc Vallee in Paris July 7, 2009.

LONDON (Reuters) - Britain's Duchess of York, caught on camera apparently offering to sell access to her ex-husband, UK trade envoy Prince Andrew, said on Sunday she was sorry for her "serious lapse in judgment."

According to footage on the News of the World newspaper's website', Sarah Ferguson appears to ask for $40,000 in cash and 500,000 pounds ($718,500) by wire transfer, claiming she could introduce the undercover reporter to the prince.

Prince Andrew, the second son of Queen Elizabeth and fourth in line to the throne "categorically" denied any knowledge of the meeting that took place between the Duchess of York and the News of the World, Buckingham Palace said in a statement.

The Duchess, known as "Fergie," who is no stranger to controversy, said she deeply regretted the sting and admitted her financial situation was "under stress," British media reported.

"I very deeply regret the situation and the embarrassment caused," Ferguson 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," she added.

In the tape filmed on Tuesday, flame-haired Ferguson, over a glass of red wine and a cigarette, makes it clear that her former husband "never does accept a penny for anything."

The sting is nonetheless likely to cause embarrassment for Andrew, who divorced Ferguson amicably in 1996 after a decade-long marriage, and Britain's austere royal family.

The 50-year-old prince, also known as the Duke of York, acts as Britain's special representative for international trade and investment, augmenting work by the business ministry.

"Five hundred thousand pounds when you can, to me ... open doors," she said in the film the newspaper said was shot at a plush London apartment, before shaking hands with the reporter who had posed as a wealthy businessman.

"Then you open up all the channels whatever you need, whatever you want ... We can do so much."

The newspaper reported Ferguson, whose New York-based promotional company Hartmoor folded last year, saying she was a "complete aristocrat" and that she and Andrew were the "happiest divorced couple in the world."

In an earlier meeting, the newspaper quoted her saying she did not have "a pot to piss in."

ROYAL PROTOCOL

"Fergie" arrived like a breath of fresh air on the sedate royal scene in 1986 as a confident career-minded woman determined to live life to the full.

But she ruffled feathers by refusing to let royal protocol get in the way of a good time and had to get used to unrelenting ribbing at the hands of Britain's royal-obsessed media who never warmed to the jet-setting princess.

She said on the eve of the wedding she was "not the sort of woman who is going to meekly trot along beside her husband."

The couple have two daughters, 21-year-old Beatrice and Eugenie, 20.

A remote descendent of King Charles II, "Fergie" was one of Andrew's childhood playmates and her father Major Ronald Ferguson was polo manager to Prince Charles, heir to the throne. She was herself the child of a broken marriage.

Romance bloomed after Princess Diana, the late wife of heir to the throne Prince Charles, suggested Sarah as an escort for Andrew at the Queen's annual house party.

While Ferguson, 50, never matched Diana's worldwide adoration or fame, she found some consolation in the United States through a variety of television appearances, penning weight loss books and charity work.

The duchess was expected to pick up an award in Los Angeles on Sunday night for her work with underprivileged children at an awards ceremony organized by children's charity Variety.

(Additional reporting by Caroline Copley; Editing by Sonya Hepinstall and Ralph Boulton)