The allegations against Andrew, 54, were made in a Florida federal court filing last week by Jane Doe #3, who was an underage minor at the time. The woman, now identified as Virginia Roberts, claims that while working for American billionaire and financier Jeffrey Epstein she was forced to have sex with various individuals and participate in sexual orgies.
"One such powerful individual Epstein forced Jane Doe #3 to have sexual relations with was a member of the British Royal Family, Prince Andrew (a/k/a Duke of York). Epstein instructed Jane Doe #3 that she was to give the Prince whatever he demanded," the court documents read.
The allegations have emerged as part of a civil lawsuit over an agreement federal prosecutors struck with Epstein, who pleaded guilty in Florida state court to solicitation of a minor for prostitution and served thirteen months in prison. Jane Doe #3 and other alleged victims claim the deal Epstein struck to avoid federal prosecution violated their civil rights.
The court documents state that, "Jane Doe #3 was forced to have sexual relations with this prince when she was a minor in three separate geographical locations: in London (at Ghislaine Maxwell’s apartment), in New York, and on Epstein’s private island in the U.S. Virgin Islands (in an orgy with numerous other under-aged girls).”
The woman has also told a British tabloid that Epstein paid her about $15,000 after she allegedly slept with Prince Andrew.
Buckingham Palace has forcefully denied any suggestion of impropriety.
"It is emphatically denied that HRH The Duke of York had any form of sexual contact or relationship with Virginia Roberts," the Palace said in a statement, using the publicly identified name of Jane Doe #3. "The allegations made are false and without any foundation.”
Separately, Palace officials told ABC News, “Any suggestion of impropriety with underage minors is categorically untrue."
Andrew, who has not commented publicly on the claims, traveled to Royal Lodge, his home near Windsor Castle, from his ski vacation in Verbier, Switzerland, Sunday to deal with the ever-growing scandal. His daughter, Princess Eugenie, and her boyfriend, Jack Brooksbank, vacationing with him in Verbier, traveled with him.
His other daughter, Princess Beatrice, has been vacationing in St. Bart's with her boyfriend.
Andrew is expected to attend the World Economic Forum in Davos, Switzerland, Jan. 21 to host a reception with foreign leaders on behalf of the British Government. Sources say that is expected to stay the same but will be reviewed again closer to the time.
"The Duke is very clear he's innocent of the charges and he's now getting on with his work," royal sources close to Prince Andrews told ABC News. "He's working very hard in the creation of jobs in UK, apprenticeships. He won't be distracted by the allegations. Now that he has denied the allegations, he will get on with his job."
Queen Elizabeth remains at Sandringham in Norfolk and it is very much business as usual, sources told ABC News.
She attended church Sunday with her husband, Prince Philip, and greeted well-wishers. Palace aides said this is "distressing" for her but Buckingham Palace announced this morning a rare foreign State visit to Germany in June for the queen and Prince Philip.
Palace aides, meanwhile, have had to scramble to deal with the sordid allegations that have engulfed Prince Andrew.
"The Palace lawyers are looking closely at the weekend's reporting in case any legal action is required. Any breach of code or any defamation against Prince Andrew will be closely examined," royal sources told ABC News.
Senior solicitors at the London-based law firm Harbottle & Lewis who deal with privacy matters for the Palace were reviewing both the sensational allegations in the press and the legal claims in the Florida documents, according to sources.
The father of Jane Doe #3 spoke to several British tabloids this weekend suggesting the young woman met the queen.
Buckingham Palace who keeps records of anyone in close proximity to Her Majesty,as well as security services who routinely review anyone meeting The Queen, was quick to bat it down.
A Palace spokesman told ABC News, "There is nothing to suggest that this claim is true. We have no record of such a meeting."
Prince Andrew is not the only high-profile individual named in the legal papers.
"Epstein also trafficked Jane Doe #3 for sexual purposes to many other powerful men, including numerous prominent American politicians, powerful business executives, foreign presidents, a well-known Prime Minister, and other world leaders," the court documents read.
One of those named in the court papers is Harvard University law professor Alan Dershowitz, who was part of Epstein’s defense team in 2007.
"For the first time in my life, after representing people for 50 years, I have been falsely accused of a serious crime by a serial liar and two corrupt lawyers who know full well that the story is made up," Dershowitz told ABC News. "I was never alone with this woman. I do not know who she is. I never, as far as I know, was in her presence.
"The story is completely and totally made up and the lawyers helped make it up," he said. "They know it's false."
Neither Prince Andrew nor Dershowitz are named as defendants in the case and no criminal charges have been filed against either man.
Epstein's representatives did not respond to ABC News' request for comment as of this writing.
A lawyer for Roberts issued a statement to ABC news on behalf of his client.
"I am looking forward to vindicating my rights as an innocent victim," the statement read.