Virginia Roberts, 31, says she was trained by billionaire and convicted pedophile Jeffrey Epstein to be an underage sex slave to him and his powerful friends - including the prince.
Her accusations are laid out in a US lawsuit, which has been making headlines around the world, leading to the royal family breaking with its usual protocol to issue two strongly-worded statements denying the claims.
Andrew has flown back to the UK from a skiing holiday in the ritzy Swiss resort of Verbier after the reports emerged that he had been named in the lawsuit filed last week in Florida.
Ms Roberts now lives in the US state of Colorado but at one stage had settled on the NSW Central Coast where she had three children with her Australian husband.
She originally waived her right to anonymity in an interview she gave to Britain's Mail on Sunday in 2011.
At the time, the paper reported that Ms Roberts was 17 and above when she met the prince and there was no suggestion of any sexual relations between the pair.
But in newly-filed court documents, she says she was paid $US15,000 ($18,500) to have sex with the prince in London, New York and on Mr Epstein's private island in the Caribbean.
In a second statement released over the weekend, a Buckingham Palace spokesman said: "It is emphatically denied that the Duke of York had any form of sexual contact or relationship with Virginia Roberts.
"The allegations made are false and without any foundation."
Ms Roberts' father, Sky Roberts, also claimed his daughter had met the Queen in London.
Buckingham Palace said there is "no record" of a meeting between them.
The accusations against Andrew are part of a lawsuit over how US federal prosecutors handled the case of Epstein, who was jailed for 18 months in 2008 for soliciting a minor for prostitution.
Ms Roberts claims Epstein kept her as a sex slave between 1999 and 2002, when she was aged between 15 and 17.
"I was a pedophile's top girl, being trained up for a British prince," News Corp quoted Ms Roberts as saying of her relationship with Epstein.
"I was totally under Jeffrey's spell. I was his personal sex slave."
In a statement released through her lawyers, Ms Roberts said she stood by her claims.
"These types of aggressive attacks on me are exactly the reason why sexual abuse victims typically remain silent and the reason why I did for a long time," she said.
"That trend should change. I'm not going to be bullied back into silence."
Ms Roberts and her husband are believed to have moved to the US 18 months ago.
