Prince Andrew, Queen Elizabeth’s second son, has reached an out-of-court settlement with Virginia Giuffre, the woman who sued him over alleged sexual assault.

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Giuffre had accused the prince of sexually assaulting her in New York when she was 17 in 2001.

The 38-year-old woman had also alleged that Jeffrey Epstein, Andrew’s friend, set her up for the sexual encounter.

In the lawsuit, Giuffre claimed the Duke of York, 61, had sex with her without her consent, even though he was aware of her age at the time.

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But Andrew denied the allegations against him on several occasions while Queen Elizabeth, 95, stripped him of his royal titles amid the case.

In a joint statement before the Manhattan federal court on Tuesday, lawyers of both parties said they have decided to halt the trial.

The statement also said the settlement in principle requires Andrew to make a “substantial donation” to Giuffre’s charity in support of victims’ rights.

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“Virginia Giuffre and Prince Andrew have reached an out of court settlement. The parties will file a stipulated dismissal upon Ms Giuffre’s receipt of the settlement (the sum of which is not being disclosed). Prince Andrew intends to make a substantial donation to Ms Giuffre’s charity in support of victims’ rights,” the statement read.

“Prince Andrew has never intended to malign Ms. Giuffre’s character, and he accepts that she has suffered both as an established victim of abuse and as a result of unfair public attacks. It is known that Jeffrey Epstein trafficked countless young girls over many years.”

According to the Telegraph, the Duke of York is expected to pay Giuffre over £12 million as part of the settlement.

It is understood that the money would be paid by the queen.

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