Oscar winning actor Michael Douglas has issued a pre-emptive denial of a sexual misconduct accusation, saying he wanted to get ahead of a potential story being investigated by Hollywood publications.

In a lengthy interview with entertainment industry website Deadline.com, published late on Tuesday, Douglas denied that he had masturbated in front of a woman who worked for him about 32 years ago.

"This is a complete lie, fabrication, no truth to it whatsoever," Douglas said.