Claims by Robert Eringer appearing in the media "smear" the image of the ruling prince and the reputation of Monaco, a tiny Riviera principality, the royal palace said. The claims are "for the most part baseless," a statement said.

Eringer, of Santa Barbara, California, filed a lawsuit three weeks ago in the U.S. state against Albert seeking compensation for back pay, lawyer Thierry Lacoste said.

He said that the prince's suit was in progress in the U.S. but could not say when or where it would be filed. The prince's U.S. lawyer could not immediately be reached for comment.

Eringer claimed in an interview in this week's Paris Match magazine that his work for Albert began in June 2002, while the prince was still in the shadow of his omnipotent father, Prince Rainier, who died in April 2005. Eringer claimed he was tasked by Albert with keeping abreast of potentially shady figures seeking favors in Monaco as part of an effort to root out corruption.

The work allegedly ended in March 2007 with no formal termination notice. Eringer said he, therefore, continued his job.

Eringer claimed in the interview with the picture magazine that he is a former FBI agent and said that during his private work on behalf of the prince he established contact with a handful of intelligence agencies. His claim of previously working for the FBI could not be immediately established.

The picture painted by Eringer of his work suggests cloak and dagger operations in the sunny principality, which has long attracted the rich and famous as a paradise for gamblers and those seeking a tax haven _ a status that has recently been changed.

Eringer claimed an entity dubbed the "Monaco Intelligence Service," or MIS, was set up for his operations and he installed himself in a three-room Monaco apartment with a view on the palace which he dubbed "M-base."

Paris Match showed a photo of an ID card for the Monaco Intelligence Service carrying Eringer's picture and number _ 001. Its authenticity could not be established.

However, the palace said Friday that MIS has no "legal existence."

"No structure bearing the name M.I.S. (Monaco Intelligence Service) has ever existed," the palace said.

Lacoste, Albert's French lawyer, noted that Monaco was removed this spring from the list of uncooperative tax havens established by the Organization for Economic Cooperation and Development. The image Eringer has painted of the prince and principality "is very bad," he said.

Prince Albert has faced other difficult moments since taking the throne, including public admissions of fathering a son and a daughter out of wedlock with two different women.