A legal watchdog group has filed a lawsuit alleging that US President Donald Trump is violating the constitution by allowing his businesses to accept payments from foreign governments.

The group claims Mr Trump is violating a clause in the constitution, known as the Emoluments Clause, that prohibits him from receiving money from diplomats for stays at his hotels or foreign governments for leases of office space in his buildings.

The language in the clause is disputed by some legal scholars, setting the stage for a court fight with the White House.

White House director of strategic communications Hope Hicks said that "the President has no conflicts", and referred to arguments made by Mr Trump's lawyer Sheri Dillon at the then-President-elect's news conference earlier this month.

Ms Dillon has said the framers did not intend for the constitutional prohibition to apply to fair-value exchanges, such as paying for a hotel room or venue space at a hotel.

"No-one would have thought [that when the] constitution was written that paying your hotel bill was an emolument," Ms Dillon said at a news conference.

Emoluments Clause violations 'pose grave threat' to US: lawsuit

The liberal-funded watchdog group Citizens for Responsibility and Ethics in Washington (CREW) filed the lawsuit in the Southern District of New York.

CREW is being represented in the lawsuit by two former White House chief ethics lawyers — Norman Eisen, who advised Barack Obama, and Richard Painter, who worked under George W Bush.

The two have been pushing Mr Trump to divest from his business to avoid what they believe are unprecedented conflicts that will violate the constitution.

"These violations of the Foreign Emoluments Clause pose a grave threat to the United States and its citizens," according to the lawsuit.

"As the framers were aware, private financial interests can subtly sway even the most virtuous leaders, and entanglements between American officials and foreign powers could pose a creeping, insidious threat to the Republic."

CREW faces several legal hurdles, including making the case that it even has standing to bring the lawsuit.

"We have never had a president who has, in a significant way, accepted foreign payments," CREW executive director Noah Bookbinder said.

"There are a lot of issues that have to be litigated for the first time."

Mr Bookbinder said his group would argue that President's violation had forced his organisation to divert all its resources to this fight rather than other issues, and therefore is harming it.

In his news conference, Mr Trump said that he would hand over control of his company to his two adult sons.

He announced several other measures in an attempt to mollify critics who contend that his financial interest as head of a global real estate company could conflict with his pursuit of the public good. He also vowed, for instance, that his company would strike no more deals abroad.

Mr Trump also pledged to donate any profits from foreign governments using his hotels to the US Treasury.

Mr Trump has repeatedly said federal rules on conflicts do not apply to the president. His lawyer, Ms Dillon, a partner at Morgan Lewis and Brockius, has called his moves to limit conflicts "extraordinary." But the moves have been widely panned by government ethics lawyers as insufficient.

AP