Powell has successfully sued her ex-client over the controversial comment made on the Graham Norton Show last October.
The allegation was not broadcast on the show but a number of newspapers went on to print the claims.
Price, who was not in court, has apologised unreservedly and agreed to pay substantial compensation and Powell’s legal fees.
Powell’s solicitor Mike Brookes said the allegation was ‘serious, damaging and distressing’ for Powell.
Price made her allegation in front of Norton, fellow guests Jackie Collins and Jo Brand and a studio audience of around 600.
Katie Price to pay ex-publicist Claire Powell over Peter Andre affair claims
Gemma O'Reilly and Cathy Wallace, prweek.com, 19 March 2010, 1:31pm
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Katie Price has agreed to pay 'substantial' damages to her former publicist Claire Powell, after claiming she had an affair with Jordan's ex-husband Peter Andre.
Paying damages: Katie Price
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