PKR vice-president Nurul Izzah Anwar has denied promising government contracts to Swiss national Xavier Justo in exchange for stolen information on 1MDB.
She described the allegation as a "complete lie".
Nurul, who is Lembah Pantai MP, said she has instructed her lawyers to commence legal action against New Straits Times and Berita Harian for publishing the allegation.
"For the record, I categorically deny I offered US$2 million (RM8.7 million) to Justo in future government contracts when the opposition comes into power. I have never met him.
" NST and Berita Harian have front-paged this complete lie in a sensational manner, and without any regard as to whether there is any truth in the allegations.
"I have accordingly instructed my solicitors to commence legal proceedings against the NST and Berita Harian," she added in a statement today.
Both the New Straits Time s and Berita Haria n had claimed in their reports today that Nurul had offered to buy the documents stolen from Justo's former employer and then 1MDB joint venture partner PetroSaudi International.
However, Justo had reportedly turned down the offer of government contracts, said the reports purportedly based on the Swiss national's written confession.
Justo is currently serving a three-year jail sentence in Thailand for allegedly blackmailing PetroSaudi International, but he is currently appealing against the jail sentence.
Nurul claimed that the allegations against her is a desperate attempt to deflect attention from the 1MDB scandal.
"The real question is not about Justo's so called stolen documents.
"It is about what those documents, together with reports by The Wall Street Journal , Sarawak Report and The Edge say about the grand corruption, money laundering, embezzlement and electoral bribery allegations surrounding 1MDB […]
"(Prime Minister) Najib Abdul Razak's bank statements and the 1MDB money trail can clearly answer these questions." she said.
The Lembah Pantai MP said among the questions that require answers include whether the RM2.6 billion deposited into Najib's account was really from a Middle Eastern donor or merely 1MDB money being laundered back to Malaysia.
Najib has consistently denied taking public money for personal use.