Michael Douglas has issued a pre-emptive statement denying claims of sexual harassment before they are even published.

In an interview with Deadline, the 73-year-old actor denied masturbating in front of a woman 32 years ago, calling it a "complete lie".

"I felt the need to get ahead of this. It pertains to me but I'm also getting a sense of how it reflects in our culture, and what is going on today," he said.

"I see it as a cautionary tale."

Douglas told the magazine he received a call from his lawyer, saying the Hollywood Reporter was considering running a story on a former employee of his who was accusing him of sexual misconduct.

According to Douglas, the unidentified woman claims he "used colourful language in front of her, not at her", that he "masturbated in front of her" and then "blackballed her from the industry".

Image:Douglas with children Dylan and Carys

"This is a complete lie, fabrication, no truth to it whatsoever," Douglas said.

"It's extremely painful. I pride myself on my reputation in this business, not to mention the long history of my father and everything else.

"I will 'fess up to colourful language, but the issue of masturbating in front of her? It's not an expression that related to the '80s. So I thought it stunk."

Douglas said he spoke with the reporter in charge of the story, who said the alleged victim specifically said Douglas "did not touch her", but that she was "running around" threatening to give the story to other magazines, so they were going to run it.

"I said 'I don't think that's justification, just because you might get scooped, to run a story like this'," Douglas said.

"And I tried to figure out, why the hell would somebody do this? The part that hurt the worst is having to share something like this to your wife and your children.

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"My kids are really upset, has to go to school worrying this is going to be in some article about me, being a sexual harasser.

"They're scared and very uncomfortable."

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