In a wrangle billed as the Hollywood court case of the decade, the former "brat-pack" actor and his wife, Sheryl, are in the middle of battle against two former nannies, over extraordinary allegations of sexual harassment, casual racism, abuse, and a supposed conspiracy to extort money.

Depending on your point of view, the case – due to reach Los Angeles County Superior Court on 19 June – represents either a timely attempt to crack down on money-grabbing celebrity employees, or a shocking indictment of the private failings of a modern American superstar. Either way, the highly private details have to be seen to be believed.

The case will also provide the stiffest test in years of the law surrounding confidentiality agreements, the stern contracts that prevent the private lives of the rich and famous becoming public by way of their household staff. The world of showbusiness awaits its outcome, with bated breath.

First, though, the gory details. Mr Lowe, the 44-year-old former star of The West Wing who now fronts the hit TV series Brothers and Sisters, is suing two former nannies, Jessica Gibson and Laura Boyce, for spreading "malicious lies" about him and Sheryl, with whom he has two children.

The nannies, for their part, are countersuing. They accuse the Lowes of various counts of sexual harassment. Ms Boyce's lawsuit, of which more later, alleges that Mrs Lowe walked around naked and made crude comments about her boyfriend's penis. Ms Gibson's suit claims Mr Lowe frequently exposed himself to her, and "put his hand inside [her] pants in order to touch her crotch".

On Friday, Mr Lowe lodged his latest round of papers at the Los Angeles County Superior Court, denying all charges, and kicking-off another round of legal sparring with the nannies' formidable lawyer Gloria Allred, a 66-year-old celebrity attorney whose previous clients include Heather Mills, the Spice Girl Mel B, and Paula Jones, who sued Bill Clinton for sexual harassment.

Speaking from her Beverly Hills office yesterday, Ms Allred, who describes herself as a "discrimination attorney" and "feminist lawyer," upped the ante, saying that she intended to cross-examine Mr Lowe herself "as soon as I can" in a videotaped deposition, and would be pushing for a public jury trial when the cases come to court.

Her comments, in an interview with The Independent, will fuel the flames of a row which began in remarkably public fashion at the start of April, and at one point involved three former members of Mr Lowe's household staff. On 7 April Mr Lowe wrote a lengthy article for The Huffington Post, a prominent internet site, accusing Ms Gibson of trying to extort $1.5m (£770,000) as hush money for sealing her lips about the seven years she had worked at his home.

"A former employee is demanding my wife Sheryl and I pay her by the end of the week or she will accuse us both of a vicious laundry list of false terribles," he wrote. "It is an attempt to damage and humiliate not only my wife and me, but our two young sons as well. My family is devastated at this betrayal.

"Everyone knows we live in a time where public figures are targets. But I also know of many people in everyday life who are paying the price of a climate where anyone can accuse anybody of anything, any time, and hope for a big cash pay-off at the end. Well I won't go away. No one intimidates my family... We will defend ourselves with vigour and without fear."

A day later, Mr Lowe followed up the outburst with a damning lawsuit claiming $1.5m from Ms Gibson. It accused her – together with Ms Boyce – of violation of a confidentiality contract, defamation, and infliction of emotional distress upon his family.

But any hopes he had of that being the end of it were soon dashed. On 14 April, Ms Gibson filed a counter-suit claiming, among other things, that Mr Lowe had "grabbed Gibson's buttocks without consent" several times between September 2005 and January 2008. She added that Mr Lowe had repeatedly exposed his "flaccid penis" and "erect penis" to her, as well as asking her "to touch his penis".

Although Ms Gibson – who was just 17 when she first worked at the Lowe household, for $18 an hour – seemed shell-shocked when she appeared live on the US breakfast TV show Today the following morning (she just laughed awkwardly and shook her head when asked about details of her case) she was soon joined in battle by Laura Boyce.

On 2 May, Ms Boyce, who had also by this stage retained Ms Allred as a lawyer, filed her own claim, accusing Mrs Lowe of repeatedly asking undignified and inappropriate questions about her private life.

More damagingly, but no less colourfully, the lawsuit accused Mrs Lowe of repeatedly commenting on Ms Boyce's sex life with her boyfriend, a 7ft tall former NBA basketball player.

In a dramatic, tearful press conference the day after her claim was lodged, Ms Boyce played to the assembled media, clutching a tissue and sobbing openly as Ms Allred read out a statement explaining the reasons for bringing the various counter-suits.

"We believe that the tactics the Lowes have used in suing two poor, defenceless nannies who loved and cared for their children is despicable," it read. "They will not be able to hide behind their star power, their money, their high-priced legal talent or their confidentiality clauses to shield themselves from their own improper conduct."

The ensuing tabloid storm was given particular impetus by a storyline running at the time on Brothers and Sisters (which is shown in the UK on E4), in which Mr Lowe's character, a conservative senator called Robert McCallister, was dragged into a sex scandal involving a nanny that threatened to derail his career.

Mr and Mrs Lowe immediately denied all of the allegations levelled against them by both Ms Boyce and Ms Gibson. From the start, they have claimed that the lawsuits represent an invasion of their family's hard-fought privacy.

However their legal history isn't crystal clean. Mr Lowe, who achieved fame alongside Emilio Estevez and Charlie Sheen in the so-called "brat pack" of hard living actors of the 1980s, weathered a near career-wrecking storm 20 years ago when videos surfaced of him engaging in sex with a teenager. He was sentenced to 20 hours of community service.

Despite Mr Lowe having subsequently cleaned up his act, and got his career back on track, the two nannies aren't the only ones to have tangled with him. Last week, Mr Lowe and his wife quietly withdrew a lawsuit against Peter Clements, a former chef whom they had accused of having sex in their marital bed while they travelled, and of stealing food and pills. Details of that settlement were not made public, but it was suggested in some quarters that Mr Clements, who commented simply "it's great it's been dropped", may now give evidence for Mr Lowe in the upcoming court case against Ms Gibson and Ms Boyce.

Meanwhile, and in stark contrast to the noisy behaviour of their accusers, the Lowes have been playing a quieter game. Their lawyer, Larry Stein, has declined to discuss specifics. However he told the Los Angeles Times this week that it would provide a landmark skirmish in the battle to uphold the legal basis of confidentiality agreements.

"They're legally binding agreements," he said. "If properly prepared and executed as part of a work environment, they can be extremely effective. They're not a violation of the 1st Amendment. It's not a private gag order. It's a contractual arrangement between two parties."

Ms Allred, however, is playing hardball. Yesterday, she attempted to present her clients' battles as David versus Goliath encounters, against a star who had attempted to use his profile and wealth to rubbish their reputation. She also said the case would establish whether all Americans, even celebrities, are equal before the law.

"Rob Lowe chose to start this by engaging in a pre-emptive strike," she said. "At the time, some PR people were saying that's very clever. Well, we have now filed a counter-suit saying that it was intimidation, so now they're saying it's not so clever.

"You cannot retaliate against an employee because that employee alleges sexual harassment. So even if we were not successful in the sexual harassment case, we could be with the retaliation one.

"Just because somebody is a celebrity, doesn't mean they are above the law. And the laws of California protect employees from sexual harassment in the workplace .

"People say 'it's your home, why can't you wander round naked?' But that home is also workplace for your employees, and the law says you must respect that. Celebrities don't enjoy any special rights."