Washington (CNN) There is pervasive anxiety inside the walls of the White House over the fallout around allegations leveled against President Donald Trump by porn actress Stormy Daniels, multiple sources tell CNN, with some officials worried that the salacious accusations and tangled legal fight could dwarf past controversies.

The story of the pair's alleged 2006 relationship blends the scandalous details of an affair, a bungled attempt to silence the porn actress and the President's penchant for a larger-than-life lifestyle before he entered the White House, a combination that seems too combustible not to further entangle the Trump administration.

For weeks, top White House aides -- with the help of Trump's longtime attorney -- have fought to keep the scandal around the President and Daniels outside the walls of the West Wing. Until Wednesday, the President's aides had shut down any questions about Daniels, denying the allegations against Trump and distancing the White House from any litigation.

That became untenable by Thursday, a day after White House press secretary Sarah Sanders tacitly acknowledged that Trump was party to a suit involving Daniels, repeatedly telling reporters that "the arbitration was won in the President's favor."

The admission drew the men and women running the White House fully into the controversy around Trump's alleged affair with Daniels months after his wife, Melania, had given birth to their son.

Unlike with past answers, Sanders was unable to deflect repeated inquiries at Wednesday's press briefing and, speaking about what was meant to be a secret court order, openly admitted that the agreement involved the President.

"I can share that the arbitration was won in the President's favor," Sanders told reporters. "I would refer you to the President's outside counsel on any details beyond that."

Lawsuit

The questions came a day after Daniels sued Trump in Los Angeles Superior Court, where a lawyer for the porn actress alleged that the President failed to sign the nondisclosure agreement brokered by his longtime lawyer Michael Cohen, thereby nullifying it. The lawsuit also claims Cohen "surreptitiously initiated a bogus arbitration proceeding against Ms. Clifford in Los Angeles" without notifying her beforehand.

The statement that the arbitration was won "in the President's favor" is an admission that the nondisclosure agreement exists and that it directly involves the President. It was the first time the White House had admitted the President was involved in any way with Daniels and it represented a break in how the White House had previously responded to questions about her.

The disclosure was an uncharacteristic slip by Sanders, whose team has largely deflected questions about Daniels for the last month by claiming they had been "asked and answered" during the 2016 campaign.

Aides inside the White House were less than enthusiastic about responding to the ever-growing list of questions from reporters about the affair.

One concern is how the story has already overshadowed the White House's day-to-day work, leaving some aides working to figure out how to explain the suit that Daniels -- whose real name is Stephanie Clifford -- filed against Trump this week.

One frustrated White House official, who vented about how the situation has landed squarely in the laps of those who work in the White House, said the controversy is fully up to Cohen to address.

"It's Michael Cohen's mess," the exasperated official said.

Even as aides grapple with how to talk about this issue, Trump is taking no responsibility for the scandal, people familiar with the President's thinking said, highlighting how the tangled web of outside lawyers continues to complicate matters at the White House.

What remains less clear is how the controversy is being received in the East Wing of the White House, where Melania Trump spends much of her time away from public view

She has quietly made her displeasure known at previous stories of potential marital misconduct -- riding separately to the State of the Union address, for example -- so it's an open question how she will react to this resurging storyline of Stormy Daniels.

No chaos, though

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The growing story comes as Trump tries to declare that his White House is running at peak performance, not descending into the state of chaos portrayed in a slew of reports.

"The new Fake News narrative is that there is CHAOS in the White House," Trump tweeted on Tuesday. "Wrong!"

But in the days since his claim, the President has seen his economic advisers in deep disagreement over whether to level the new tough tariffs on steel and aluminum imports, his top economist quit over Trump's intention to move forward with the plan and the Daniels story balloon.

Cohen finds himself at the center of the controversy after weeks of denying that Trump had any knowledge of the payment the attorney made to Daniels in October 2016 to ensure her silence.

Cohen, in a statement last month, said he had paid Daniels without the knowledge of "the Trump Organization nor the Trump campaign ... and neither reimbursed me for the payment, either directly or indirectly."

Since that statement, though, Daniels' story has continued to balloon, with the porn actress speaking carefully to the media about her relationship with Trump.

Multiple former Trump campaign officials told CNN on Thursday that it isn't entirely surprising that Cohen would work to quell the Daniels fallout without express acknowledgment from Trump.

"Michael Cohen would walk across a pit of hot coals for Donald Trump, and it doesn't surprise me that he would do something on his own whether (Stormy Daniels) is telling the truth or not," a former campaign official said. "He's the most loyal person in Donald Trump's orbit that doesn't have the same DNA as Trump."

Whether or not Cohen paid Daniels without Trump's knowledge is a central question, given that acting on behalf of a client without that client knowing could be a violation of New York state bar rules.

Democrats and Daniels' attorneys have slammed Cohen's suggestion that he acted on his own, with the porn actress's lawyer writing in their suit that it "strains credulity to conclude that Mr. Cohen is acting on his own accord without the express approval and knowledge of his client Mr. Trump."

David Brock, a Democratic operative whose organization American Bridge has filed two complaints against Trump and Cohen over the Daniels saga, said Thursday that "the odds Trump and his lawyer conspired to break the law in the 2016 campaign increase with each new stomach-turning revelation."

"This scandal poses serious problems for Trump and the White House, which is why American Bridge is doubling down on our legal efforts," Brock said. "The FEC must investigate."

Nicholas Fortuna, founder and managing partner of the law firm Allyn & Fortuna, questioned Cohen's lawyering in the case.

"I really think this is a slow-moving train wreck for Trump in this case," Fortuna said, "because he is not going to have the opportunity to keep this quiet."