Former Sandhurst Sergeant John Hardy has admitted he fabricated a story about a picture of Britain's Prince William wearing a bikini in return for money.
The former military academy instructor - who is currently on trial for allegedly selling information about William and his brother Prince Harry to a newspaper - has confessed he made up the story and that the image for which he was paid £4,000 never existed.
Speaking at his trial at the Old Bailey, Hardy said: "I have not seen the picture, the police haven't seen the picture, The Sun haven't seen it ... There is no picture.
"I've never seen a photo of Prince William in a bikini. I never gave a photo of Prince William to anyone."
Hardy is on trial for misconduct in public office for allegedly receiving more than £23,000 in payments in return for leaking information about the princes and others between 2006 and 2008.
Hardy claimed in court that while he was in Australia he received a phone call from the publication's royal editor Duncan Larcombe after hearing the Duke of Cambridge had attended a James Bond fancy dress party dressed in a bikini and a Hawaiian shirt.
The former sergeant told jurors he "fabricated a story" to make it appear as though he could get a photo of the prince in the costume.
According to the Guardian newspaper he explained: "I said I'd heard about it. At the time I didn't know [if there was a photo] and asked him to call back in an hour."
Having never provided the newspaper with the image, Hardy insists all he ever passed on was information that was already in the public domain and not confidential.
Hardy has denied committing misconduct in public office while his wife Claire - who collected a cash payment for the story after her husband allegedly told her he'd won a bet - and Larcombe, who have been charged with aiding and abetting him, have also pleaded not guilty.