James Franco has been accused of using his now-defunct acting school to sexually exploit women, in a lawsuit filed by two former students.

According to the New York Times, Sarah Tither-Kaplan and Toni Gaal allege that Franco and his male collaborators subjected women to sexually exploitative auditions and film shoots while dangling film roles in front of them that never materialised.

The Oscar-nominated actor set up a school called Studio 4 with partner Vince Jolivette, with branches in New York and Los Angeles. Tither-Kaplan and Gaal enrolled in the LA branch and paid a monthly tuition of $300.

The two women claim that the school also offered additional master classes, which could cost as much as $2,000 each, including a $750 master class for sex scenes. According to the lawsuit, prospective students for this class had to audition on videotape so Franco could later review the material. They allegedly had to sign away their rights to these recordings.

Tither-Kaplan and Gaal say that in auditions and classes they were encouraged to push beyond their comfort zones, and were denied the protections of nudity riders and other guidelines that define how actors should be portrayed and treated in nude scenes.

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Gaal claims she recorded an audition for the sex scenes master class but was not accepted after voicing her unease about how it was being run. Tither-Kaplan says she took the class, which led to roles in some of Franco's independent films – some of which remain unreleased. She says she was often asked to appear in nude or sex scenes, and that during the making of an orgy scene for one film, Franco removed plastic guards covering other actor's genitals while simulating oral sex on them.

Franco has claimed the representation is “not accurate” in a statement via his lawyer Michael Plonsker. He denies the accusations and says the lawsuit is “ill-informed”.

“James will not only fully defend himself, but will also seek damages from the plaintiffs and their attorneys for filing this scurrilous publicity seeking lawsuit,” Plonsker said.

The Studio 4 school was closed in autumn 2017. The lawsuit filed by Gaal and Tither-Kaplan seeks monetary damages and the return or destruction of any video recordings of former Studio 4 class members.

Franco has previously faced questions over his behaviour towards women in both his professional and personal life.

In 2014, messages he exchanged over Instagram with a 17-year-old girl were shared online. Franco, who was shown in screengrabs asking the girl's age, whether she had a boyfriend and if he should “rent a room”, confirmed the incident took place and said he was “embarrassed” and “a model of how social media was tricky”.

In 2018, he was accused of sexual misconduct by five women, including Tither-Kaplan. At the time, his lawyer refuted the claims and Franco addressed them in an interview with Seth Meyers.

“I have my own side of this story, but I believe in these people that have been underrepresented getting their stories out, enough that I will hold things back that I could say, just because I believe in it that much,” he said.

“If I have to take a knock, because I am not going to try and actively refute things, then I will, because I believe in it that much.”