Oscar-winning actor Geoffrey Rush is suing The Daily Telegraph over 'false and demeaning' claims of inappropriate behaviour toward a female cast member on the set of King Lear.

The newspaper made claims on its front page last Thursday about an incident it alleged dated back to the Sydney Theatre Company production in 2015.

The story was tagged as a 'world exclusive' and did not spell out the specifics of the allegations but contained a statement from the STC.

During a press conference at his lawyer's offices in Melbourne, Rush said he had launched defamation action against the newspaper in the Federal Court on Friday.

Academy Award winner Geoffrey Rush is suing The Daily Telegraph over 'false' claims over inappropriate behaviour. Rush is pictured before delivering a statement on Friday

Rush had strenuously denied the claim. The Shakespeare play ran from November 2015 to January 2016

'It is an action I'm taking in order to redress the slurs, innuendo and hyperbole that they have created around my standing in the entertainment industry and in the greater community,' he said.

'The Daily Telegraph has made false, pejorative and demeaning claims splattering them with unrelenting bombast on its front pages.

''It is an action I'm taking in order to redress the slurs, innuendo and hyperbole that they have created around my standing in the entertainment industry and in the greater community,' said Rush

'This has created irreparable damage to my reputation, has been extremely hurtful to my wife, my daughter and my son and to my extended family as well as to many colleagues in the film, television and theatre industry.

'The situation is intolerable and I must now seek vindication of my good name through the courts'.

The Telegraph story included a statement from the STC which referred to a complaint allegedly made against Rush.

Rush strenuously denied the allegations that day. He called it a 'denial of natural justice' that the STC would make a public statement about an alleged complaint without telling him the details.

Rush's lawyer, Nicholas Pullen from HBL Ebsworth, told reporters the action was against 'only' the Telegraph, not the theatre company.

He said Rush wanted to have the matter heard as quickly as possible.

Contacted for comment, The Daily Telegraph said it will defend its position.

Rush said: 'The Daily Telegraph has made false, pejorative and demeaning claims splattering them with unrelenting bombast on its front pages'

'The Daily Telegraph accurately reported the STC received a complaint alleging Mr Geoffrey Rush had engaged in inappropriate behaviour,' editor Chris Dore said.

'We will defend our position in court'.

Filing the proceedings in the Federal Court means there will be no jury.

Rush won the Academy Award for his portrayal of David Helfgott, a classical pianist, in the 1997 film Shine. He has also won an Emmy and a Tony award.