Porn star Stormy Daniels believes she is free to discuss an alleged sexual encounter with Donald Trump after Trump's lawyer acknowledged paying her US$130,000 ($175,940) just before Trump was elected president in 2016.

At the same time, developments in the bizarre case are fuelling questions about whether such a payment could violate federal campaign finance laws.

Daniels, whose real name is Stephanie Clifford, believes that Trump's personal lawyer, Michael Cohen, invalidated a non-disclosure agreement after two news stories were published on Wednesday: one in which Cohen told the New York Times he made the six-figure payment with his personal funds, and another in the Daily Beast, which reported that Cohen was shopping a book proposal that would touch on Daniels' story, said Daniels' manager, Gina Rodriguez.

"Everything is off now, and Stormy is going to tell her story," Rodriguez said.


At issue is what, exactly, happened inside a Lake Tahoe, Nevada, hotel room in 2006 between Trump, then a reality TV star, and Daniels, who was promoting a porn production company during a celebrity golf tournament.

In the years since, Daniels has claimed that she and Trump had sex once and then carried on a subsequent years-long platonic relationship. But she has also, through a lawyer, denied the two had an affair. Trump's lawyer, Cohen, has denied there was ever an affair.

The actress first detailed her account of an alleged extramarital affair with Trump in 2011, when the celebrity website The Dirty published it but then removed the material under the threat of a lawsuit, according to the site's founder, Nik Richie.

Her story then remained largely out of public view until a month before the presidential election, when the website The Smoking Gun published an account that went mostly unnoted by major news organisations.

In January, the Wall Street Journal reported that a limited liability company in Delaware formed by Cohen made the six-figure payment to the actress to keep her from discussing the affair during the presidential campaign.

Cohen said the payment was made with his own money, and that "neither the Trump Organisation nor the Trump campaign was a party to the transaction with Ms Clifford, and neither reimbursed me for the payment, either directly or indirectly". He was responding to inquiries from the Federal Election Commission, which is investigating an advocacy group's complaint that the October 2016 transaction violated campaign finance laws.

The payment by Trump's lawyer was not reported as a campaign expenditure nor an in-kind contribution, and the origin of the money is still unclear, said Paul Ryan, a vice-president at Common Cause, the group that filed the complaint.

But Bradley Smith, the Republican chairman of the Federal Election Commission from 2000 to 2005, was sceptical that the payment by Cohen could pose a campaign finance issue. "You'd have to prove that it was a co-ordinated expenditure, and that the reason it was done was for the benefit of the campaign," he said.

At the time of the payment, which followed the release of footage from Access Hollywood, in which Trump was recorded bragging about grabbing women's privates, Daniels was negotiating with multiple national news networks about telling her story.

The alleged affair between the actress and Trump occurred in 2006, a year after his marriage to his third wife, Melania.

A lawyer for Daniels, Keith Davidson, has previously distributed statements on her behalf denying there was any affair. But in a 2011 interview with the gossip magazine In Touch, the actress — who the magazine said passed a polygraph exam — said the two had sex on one occasion and she described subsequent in-person meetings, phone calls and discussions about a potential TV appearance.