Prince Andrew was accused in court documents of touching a young woman’s breast at the Manhattan mansion of Jeffrey Epstein, the wealthy financier now facing federal sex trafficking charges in New York.

The allegation was contained within a tranche of just unsealed court papers in a defamation case involving Ghislaine Maxwell, a British socialite and media heiress accused of procuring underage girls for Epstein and his social circle of the rich, famous and powerful.

Maxwell was sued by Epstein accuser Virginia Giuffre in 2015. Giuffre alleged that Maxwell defamed her by claiming she was a liar. Giuffre had also alleged that Epstein coerced her into sexual encounters with Prince Andrew.

Buckingham Palace has repeatedly denied Giuffre’s allegations. In a highly unusual statement issued in 2015, Buckingham Palace said “any suggestion of impropriety with underage minors is categorically untrue” and explicitly denied Prince Andrew ever had sexual contact with Giuffre.

“It is emphatically denied that the Duke of York had any form of sexual contact or relationship with [Giuffre]. The allegations made are false and without any foundation,” the royal household later added.

Documents filed by Giuffre’s lawyers cite a deposition of Joanna Sjoberg, who also accused Maxwell of bringing her to Epstein.

Sjoberg’s deposition testimony, Giuffre’s lawyers said, described allegations involving Prince Andrew.

“Ms Sjoberg also testified about sexual acts that occurred with her, Prince Andrew, and Ms Giuffre, when she and [Maxwell] were staying at Epstein’s Manhattan mansion,” Giuffre’s lawyers said in the document, which was filed in January 2017.

Sjoberg testified, per court documents: “I just remember someone suggesting a photo, and they told us to go get on the couch. And so Andrew and Virginia sat on the couch, and they put the puppet, the puppet on her lap. And so then I sat on Andrew’s lap, and I believe on my own volition, and they took the puppet’s hands and put it on Virginia’s breast, and so Andrew put his on mine.”

Giuffre’s lawyers said: “Ms Sjoberg’s testimony corroborates Ms Giuffre’s account of how defendant recruited her (and others) under a ruse of a legitimate job in order to bring them into the household to have sex with Epstein.”

Giuffre has alleged that Epstein began sexually abusing her when she was 16.

The document also contains a photo which, Guiffre’s attorneys say, shows Andrew “with his hand around Ms Giuffre’s bare waist while she was a minor child, while posing with [Maxwell], inside [Maxwell’s] house in London”.

The lawyers said in the papers: “This particular photograph corroborates Ms Giuffre’s claims, and there is no other reasonable explanation why an American child should be in the company of adults not her kin, in the London house owned by the girlfriend of a now convicted sex offender.”

Maxwell’s lawyer did not respond to three requests for comment. Giuffre’s attorneys did not comment. Epstein’s lawyers did not respond to requests for comment.

Maxwell has denied the allegations.

The southern district of New York, which is prosecuting Epstein for alleged sex trafficking, said: “We’re not a party to this litigation so we can’t comment.” Epstein, who has been jailed since his arrest, has pleaded not guilty in the case.