Socialite Paris Hilton has reportedly admitted fabricating a story about the former girlfriend of her ex-fiance PARIS LATSIS, who claimed the hotel heiress made defamatory statements about her.

Model/actress/producer ZETA GRAFF filed a $10 million (GBP5.5 million) lawsuit last summer (05), alleging Hilton made-up stories about Graff's jealous and criminal behaviour and supplied them to the New York Post newspaper.

A source tells the publication, "Hilton made a deposition in the slander lawsuit, and admitted she planted a false story in the press in which she claimed Graff attacked her in a London nightclub.

In a statement, Graff says, "Hilton will learn a valuable lesson about what happens when you try to ruin another person's reputation. She made a number of false statements about me, and she repeatedly lied under oath during her recent deposition. I look forward to her explaining all of this to a jury."

Hilton's publicist ELLIOT MINTZ says, "In view of the fact that it's an ongoing matter, I'm not in a position to make any comment."