He created one of the most breath-taking and lucrative franchises in show-business. But the once-penniless street performer behind Cirque du Soleil is involved in an intriguing legal spat over the colourful acrobatic manoeuvres that allegedly take place in his bedroom.

Guy Laliberté, the billionaire impresario whose troupe will today celebrate its 25th birthday, has announced plans to sue the publishers of an unauthorised biography which depicts him as a bed-hopping scoundrel with an inexhaustible appetite for sex, drugs, and a rock and roll lifestyle.

The threat, which sparked a circus of the media variety in Mr Laliberté's native Canada, comes after the influential Montreal news magazine Macleans published a revelatory extract from the muck-raking new book, entitled The Fabulous Story of the Creator of the Cirque du Soleil.

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It details some of the famously decadent parties that Mr Laliberté financed with the proceeds of his business empire, which currently controls 18 shows in dozens of countries, and supports almost 4,000 employees, including hundreds of the world's most talented dancers and acrobats.

During the parties, global business leaders, politicians, and Hollywood stars were entertained by Cirque du Soleil performers, and provided with millions of dollars of fine food and wine. Author Ian Halperin, who quotes dozens of former guests, details heroic displays of debauchery. "Everything you wanted was available at Guy's parties," said Myra Jones, a Milan-based fashion model who attended several of the events. "Drugs, the best music spun by famous DJs flown in from Europe and the USA, and the wildest sex you could ever imagine."

The book claims that Laliberté's assistants invited busloads of prostitutes from his native Montreal to the parties, which were attended by the likes of Robert DeNiro and Sir Paul McCartney. Mere B-list guests were required to sign a confidentiality agreement before attending.

"It was beyond crazy; it was complete insanity for hours. Everyone was so beautiful and so free," said Angie Everhart, a Playboy model. "If there was a straight person in the house they must have freaked out watching everyone else trip. They would have thought they were the one on drugs."

However the passage in the book which appears to have most upset Mr Laliberté, an eccentric figure who now has a personal fortune estimated at $2.5bn, concerns his ex-girlfriend Rizia Moreira, a Brazilian model who is the mother of three of his five children.

"He'd come home after sleeping with other women and have sex with me," she complained in the book. "If he had told me, I never would have had sex with him."

Mr Laliberté has taken exception to the claims. This week, he wrote to Transit Publishing, which released the book, denying several key allegations made in the book and demanding that it is immediately withdrawn from stores. Macleans has also been issued with a legal letter.

However Mr Halperin yesterday returned fire, with interest. "We intend to fight this vigorously and take this as a gross infringement on freedom of the press," he told the New York Post. "Everything in my book is true and can easily be proven. If he continues to harass me, I will launch a slander suit."

Whatever the eventual outcome, the row comes at an inconvenient time for Mr Laliberté, who is supposed to be focused on training for a forthcoming space flight, for which he has paid a Russian company $35m.