Former Grammy's boss Deborah Dugan attempted to extort millions from the organisation, her successor claims, after reports she had claimed sexual and financial misconduct.

The Recording Academy, which runs the Grammy Awards, released an explosive statement Monday saying that the ousted CEO created a 'toxic and intolerable' work environment.

The ferocious statement by the Academy's Chair and interim CEO Harvey Mason Jr. claims that after those bullying claims were put against Dugan she then made her own allegations against the Academy and 'wanted millions' to withdraw them.

It comes after Dugan was placed on administrative leave last Thursday just six months after she became the first woman to head the Grammys.

Sources claimed Dugan was fired in an effort to silence her and others who were preparing to reveal sexual harassment and financial impropriety within the institution.

Deborah Dugan was placed on administrative leave last Thursday by the Academy just six months after she became the first woman to head the Grammys

The ferocious statement by the Academy's Chair and interim CEO Harvey Mason Jr. (pictured) claims that after bullying claims were put against Dugan she then made her own allegations against the Academy and 'wanted millions' to withdraw them

Mason Jr.'s statement today said that the Executive Committee was first made aware of an 'abusive and bullying' environment in November last year.

'After we received the employee complaints against Ms. Dugan, she then (for the first time) made allegations against the Academy.' Mason Jr. wrote.

'Ms. Dugan's attorney then informed the Executive Committee that if Ms. Dugan was paid millions of dollars, she would "withdraw" her allegations and resign from her role as CEO.

'Following that communication from Ms. Dugan's attorney, Ms. Dugan was placed on administrative leave as we complete both of these ongoing investigations.'

An insider last week told The New York Post that Dugan was thrown out 'to shut up people who want to speak about their experience with the truth of sexual harassment, financial impropriety and [improper] insider benefits.'

Dugan and Chair of the Board of Trustees of the Recording Academy Harvey Mason Jr. present 'Best Pop Solo Performance ' nomination during the 62nd Grammy Awards Nominations at CBS Broadcast Center on November 20, 2019 in New York City

Mason Jr. today criticized the 'deeply disturbing' misinformation which he claimed was designed to create 'leverage against the Academy for personal gain.'

He added that he was saddened that this was all happening during Grammy week, with the awards to be held at the Staples Center in Los Angeles Sunday night.

Dugan released her own statement last week saying: 'What has been reported is not nearly the story that needs to be told.'

In a statement released Friday to The Associated Press, Dugan's attorney Bryan Freedman said there would be more to the story once his client was no longer restrained from speaking publicly because of her legal contract with the Academy.

He did not say how she would be released from the restriction.

The Academy's decision to place Dugan on leave came just 10 days before the 2020 Grammy Awards.

The Academy would not reveal the nature of the allegation and would only say it was a formal complaint that came from a senior female member of the team.

A source told the New York Times that the complaint was made by the assistant to Dugan's predecessor Neil Portnow.

Debbie White and Deborah Dugan attend Billboard Women In Music 2019, presented by YouTube Music, on December 12, 2019 in Los Angeles, California

The assistant, who also briefly worked for Dugan, accused her of a bullying management style. The alleged bullying led to the assistant having to take a leave of absence, it is claimed.

Portnow stepped down as CEO after facing backlash for his controversial comments at the last Grammys when he said female artists needed to 'step up' if they wanted to win.

Insiders have claimed that Dugan was ousted in a 'coup' by the board and staff who were unhappy with her shake-up of the business since taking over from Portnow.

Her suspension came just weeks after she told HR about concerns she had with the Academy's governance and practices, including voting irregularities, conflicts of interest among board members and financial mismanagement.

She wrote in a memo she believed 'something was seriously amiss at the Academy'.

Some have questioned the veracity of the complaint and pointed the finger at disgruntled employees.

'I know a lot of the board members couldn't stand her,' one source told Variety.

Former Recording Academy president and CEO Deborah Dugan speaks at the 62nd Grammy Awards Nominations at CBS Broadcast Center on November 20, 2019 in New York City (left) and the coveted Grammy trophies (right)

Another said: 'There are people who had been there for years who knew they were going to be let go and who knew they would not get a job that paid as well anywhere else.'

Freedman, Dugan's lawyer, also is representing Gabrielle Union, the former 'America's Got Talent', judge who threatened legal action against fellow judge Simon Cowell's company Syco, which co-produces the show, after she was fired in November.

Union has alleged that she was let go show after she was told that her hairstyle and clothes were 'too black'.

Freedman, in reference to the alleged silencing of Dugan, says 'this is what happens when you step up.'