The Duchess of York is doing “everything she can” to avoid bankruptcy, her spokesman has said.
It is believed that the Duchess owes around £2 million relating to her business concerns.
But while voluntary bankruptcy is still an option, a spokesman said the situation is “being managed” and that all her personal debt had been paid off.
A report in The Sunday Telegraph suggested that the Duchess owed £5m in both personal and business debt.
The newspaper suggested that the state of her finances had caused the Queen to be “deeply concerned”, according to their sources.
But the figure used by the newspaper was yesterday dismissed as “significantly” exaggerated.
Sources have have suggested that actual total owed is closer to the £2m mark.
Sarah Ferguson went public with her financial problems in May after being caught in a cash-for-access scandal.
She was filmed accepting money from a News Of The World reporter, posing as a business tycoon, in exchange for an introduction to her ex-husband, the Duke of York.