Donald Trump’s former lawyer secretly taped a conversation the pair had about payments to an ex-Playboy model, according to a report.
Michael Cohen reportedly recorded the discussion about Karen McDougal before the presidential election in 2016, which Mr Trump went on to win.
Ms McDougal has claimed she had an affair with Mr Trump for nearly a year starting in 2006, shortly after Mr Trump’s wife gave birth to their son Barron. Mr Trump denies the affair.
According to the New York Times, the FBI seized the recording during a raid on Mr Cohen’s office in April and its existence will fuel speculation on how much damage Mr Cohen could do to Mr Trump if he cooperates with prosecutors.
Mr Trump’s current lawyer, Rudy Giuliani, told the newspaper the recording was genuine but said a payment was never made.
Mr Cohen, who is no longer acting for Mr Trump, is being investigated over payments allegedly made to women to silence embarrassing news stories about Mr Trump leading up to the election.
Ms McDougal sold her story to The National Enquirer in the final months of the presidential campaign but the tabloid did not publish it, effectively keeping it from becoming public.
The Wall Street Journal revealed, days before the election, that the publication – run by Trump supporter David Pecker – had paid $ 150,000 (£114,270) to silence Ms McDougal.
In March this year, Ms McDougal sued the Enquirer, asking to be released from their agreement, which was stopping her from talking about the alleged affair.
Sky News US correspondent Cordelia Lynch said the news of the tape was “potentially very significant”.
She added: “There is a debate around whether this might amount to some kind of illegal campaign donation.
“It’s important not to get ahead of ourselves here and it’s a very complicated story – we don’t know whether this would ever be admitted as evidence in a trial and indeed if a trial would ever take place but it’s certainly problematic for the White House.
“They have always denied that an affair ever took place and that any recording like this exists but now we have Rudy Giuliani saying, yes, that conversation did happen about a payment to a woman but that the payment was never actually made.
“So, a pretty complicated story but at the heart of it is whether money was paid to a woman to try and secure Donald Trump’s reputation shortly before the election.”
Earlier this year, porn star Stormy Daniels filed a lawsuit asking a judge to invalidate a non-disclosure agreement preventing her from talking about her alleged affair with Mr Trump.
Ms Daniels described the agreement as “null and void and of no consequence” because Mr Trump did not sign it.
In May, Mr Giuliani told ABC’s This Week programme he had “no knowledge” of whether Michael Cohen had made other payments for the president, but said: “I would think if it was necessary, yes.”
On Friday, he told the New York Times that the recording seized by authorities was less than two minutes and demonstrated that the president had done nothing wrong.