Washington, Mar 13 (IANS): American porn star Stormy Daniels has offered to return the $130,000 payment she received from President Donald Trump's attorney in exchange for dissolving a so-called "Hush Agreement", the media reported.

Last month, attorney Michael Cohen said he paid $130,000 of his own money to Daniels, whose real name is Stephanie Clifford, ahead of the 2016 election in exchange for her silence regarding an alleged sexual encounter with Trump, reports CNN.

Both Cohen and the White House have denied any sexual encounter between the President and Clifford.

Clifford's attorney, Michael Avenatti, on Monday sent Cohen a letter offering to wire $130,000 by Friday to an account designated by the President.

In exchange, the settlement agreement between Clifford, Trump and Cohen's company would be "deemed null and void in their entirety".

The exchange would allow Clifford to speak publicly about her allegations of the affair with Trump, and according to the letter "use and publish any text messages, photos and/or videos relating to the President that she may have in her possession, all without fear of retribution and/or legal liability for damages".

White House press secretary Sarah Sanders said last week that "arbitration was won in the President's favour" regarding the case, reports CNN.

The statement is an admission that the non-disclosure agreement exists and that it directly involves Trump.

It was the first time the White House had admitted the President was involved in any way with Clifford.

Avenatti had told CNN last week that Clifford would "absolutely" pay back the $130,000 if she was allowed to speak about the alleged affair.