A legal fight over what should happen to records the FBI seized from President Donald Trump's personal lawyer took a surprise twist when the lawyer, Michael Cohen, was forced to reveal a secret — that he had also done legal work for Fox News host Sean Hannity.

The disclosure came as a New York judge disappointed a lawyer for Trump by letting prosecutors proceed with the cataloguing of evidence including multiple electronic devices that were seized in raids while a system is set up to ensure that records protected by lawyer-client privilege aren't disclosed to investigators.

Lawyers for Cohen and prosecutors both had reason to claim success after three hours of arguments before US District Judge Kimba Wood, who said she may appoint a special master, a neutral lawyer, to help decide which materials should stay confidential.

Wood denied a request by Trump's lawyer, Joanna Hendon, that the President and Cohen get the first crack at designating which documents should be off-limits to investigators.

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Hannity's name emerged after the judge pressed Cohen to divulge the names of the clients he's worked with since the 2016 election, whose privileged communications might be contained within his files. Cohen's legal team said he had just three clients in 2017 and 2018.

One was Trump. Another was Elliott Broidy, a Trump fundraiser who resigned from the Republican National Committee on Saturday after it was revealed that he paid US$1.6 million to a Playboy Playmate with whom he had an extramarital affair. The woman became pregnant and elected to have an abortion.

Cohen's lawyers resisted revealing the name of the third client, saying it would be embarrassing and unnecessary. Plus, the client had specifically asked for privacy and requested that they appeal any demand to divulge his name.

But Wood pressed on. "I understand he doesn't want his name out there, but that's not enough under the law."

When the name was announced, there were gasps and some laughter in a courtroom packed with journalists. A few of them raced from the courtroom. Cohen's lawyers did not detail the type of legal work he did for Hannity.

In this courtroom sketch, US District Judge Kimba Wood presides over a federal court hearing. Image / Elizabeth Williams via AP
In this courtroom sketch, US District Judge Kimba Wood presides over a federal court hearing. Image / Elizabeth Williams via AP

On his radio show, Hannity said Cohen was never involved in any matter between him and any third party. "Michael never represented me in any matter," Hannity said. "I never retained him in any traditional sense. I never received an invoice. I never paid a legal fee. I had brief discussions with him about legal questions where I wanted his input and perspective."

Later he added on Twitter the legal advice he got from Cohen was "almost exclusively about real estate."

Hannity, an outspoken supporter of Trump, has been a fierce critic of Special Counsel Robert Mueller, who is looking into Russian interference in the 2016 US presidential election.

The hearing began with an appearance by porn actress Stormy Daniels, who was swarmed by photographers and nearly fell as she was hustled into the courthouse, a scene that captured the sensational atmosphere around the case.

Adult film actress Stormy Daniels speaks to members of the media after the hearing. Photo / AP
Adult film actress Stormy Daniels speaks to members of the media after the hearing. Photo / AP

The last to enter court, she was among the first to leave. While in court, she smiled several times as she observed the proceedings from a folding chair near the back of the room. Outside afterward, she said Cohen has acted like he's above the law and that she and her lawyer are committed to making sure everyone learns the truth.

At stake is an investigation that could uncover the inner workings of Trump's fixer and image protector.

People familiar with the probe told AP that agents were seeking bank records, records on Cohen's dealing in the taxi industry, Cohen's communications with the Trump campaign and information on payments made in 2016 to two women who say they had affairs with Trump, former Playboy model Karen McDougal and Daniels.

- AP