Justin Timberlake will donate his libel damages to charity

A News of the World article in July 2004 alleged Mr Timberlake had sexual relations with model Lucy Clarkson.

The singer's solicitor Simon Smith told London's High Court Ms Clarkson had admitted lying to the newspaper.

Mr Timberlake will donate the "substantial" damages paid by the newspaper and Ms Clarkson to charity.

Mr Smith said the allegations had caused damage to the singer's "personal and professional reputations".

Under the headline "Exclusive: Bad News for Cameron as model reveals lover's secret fling", Ms Clarkson went into detail about several dates they had before spending the night together in a hotel.

'Entirely untrue'

Mr Smith said the "model and aspiring actress" had done this "despite it being public knowledge that the claimant was involved in a long-term relationship with Ms Diaz at the relevant time".

"The newspaper now accepts that all the allegations complained of are entirely untrue and without any substance," Mr Smith told the court.

David Griffiths said his client Ms Clarkson apologised for the "distress and embarrassment she has caused the claimant and Ms Diaz".

"She accepts that the story, which she sold to the newspaper, was an entire fabrication on her part and that she had not had an affair or fling with the claimant," said Mr Griffiths.

Ms Clarkson has agreed to pay Mr Timberlake money equivalent to the payment she received from the News of the World.

Benjamin Beabey, solicitor for News Group Newspapers, told the court the News of the World "entirely accepts that the allegations are without foundation".