Data analysts Cambridge Analytica has rejected a UK Channel 4 undercover report claiming it engaged in unethical entrapment activities during elections.

In a statement, the company said the report was "edited and scripted to grossly misrepresent the nature of those conversations and how the company conducts its business."

The company also said denied engaging in entrapment.

It said the damaging remarks by its executives about such practices were an attempt to "humour" the reporter and uncover his true intentions after the latter tried to steer the conversation towards such illegal activities.

"Assessing the legality and reputational risks associated with new projects is critical for us and we routinely undertake conversations with prospective clients to try and tease out any unethical or illegal intentions.

“The two Cambridge Analytica executives at the meeting humoured these questions and actively encouraged the prospective client to disclose his intentions. They left with grave concerns and did not meet with him again," it said.

Cambridge Analytica's chief executive Alexander Nix (above) is then quoted as saying that he had misjudged the situation.

"In playing along with this line of conversation and partly to spare our ‘client’ from embarrassment, we entertained a series of ludicrous hypothetical scenarios. I am aware how this looks, but it is simply not the case.

"I must emphatically state that Cambridge Analytica does not condone or engage in entrapment, bribes or so-called ‘honey traps’ and nor does it use untrue material for any purpose.

“I deeply regret my role in the meeting and I have already apologised to staff. I should have recognised where the prospective client was taking our conversations and ended the relationship sooner," the chief executive said.

In the Channel 4 undercover report, a person pretending to be a potential Sri Lankan client had spoken with Nix and two other Cambridge Analytica executives in a series of meetings in London between November last year and January this year.

'Women from Ukraine'

Cambridge Analytica Global Political managing director Mark Turnbull had said that the company did not engage in entrapment or fake news.

“We’re not in the business of fake news, we’re not in the business of lying or making stuff up and we’re not in the business of entrapment […] there are companies that do this but to me that crosses a line," he said.

But at a later meeting where Turnbull is also present, Nix is caught on camera saying that the company engaged in entrapment strategies such as secretly filming one of its operatives bribing politicians or sending girls to their homes.

“We’ll offer a large amount of money to the candidate to finance his campaign in exchange for land for instance [...] we’ll have the whole thing recorded, we’ll blank out the face of our guy and we post it on the Internet," Nix said.

He also suggested that women from Ukraine can be used to seduce politicians.

However, he said, he is just giving examples of "what can be done and what has been done".