Max Mosley, the president of the FIA, has said that he spoke in German during a sado-masochistic orgy with five prostitutes not because he was fantasising about being a Nazi but because several of the prostitutes involved were German speakers.

The News of the World alleged that Mosley, who is facing calls to resign from one of the most powerful jobs in motor sport, spanked at least one prostitute with a leather strap and counted out the strokes in German as he did so. The paper claimed that this was evidence of a Nazi-style fantasy on the part of Mosley and it also alleged that the FIA president engaged in role play as a concentration camp inmate during the five-hour orgy in a West London flat last Friday.

However, The Times has learnt that, as part of his legal action against the News of the World, Mosley will argue that he spoke in German only because at least two of the five prostitutes were German and that there was no intention on his part to engage in activity that could be said to have Nazi overtones.

After three days of lurid headlines and calls for him to resign, Mosley is going on the offensive over a scandal that has shocked Formula One and the boardrooms of the car manufacturers who compete in the sport. Since the story broke on Sunday, he has spent many hours speaking to lawyers, assembling a case against the paper that will centre on invasion of privacy and his belief that he was the victim of a set-up. It appears that Mosley will not deny that he took part in the orgy but will dispute the context in which it occurred.

In a letter to all the members of the FIA that is expected to be published today, Mosley claims that he has been the victim of a “deliberate and calculated personal attack” after what he said was a “covert investigation” of his private life and background. He said that he had been told about the investigation by what he called an “impeccable high-level source close to the UK police and security services”.

“Regrettably, you are now familiar with the results of this covert investigation and I am very sorry if this has embarrassed you or the club,” Mosley said, before adding that he had received a “very large number” of messages of support from people within the FIA and motor sport. These messages had underlined, he said, that his private life is not relevant to his work and that he should continue in his role as FIA president.

“I shall now devote some time to those responsible for putting this into the public domain but, above all, I need to repair the damage to my immediate family, who are the innocent and unsuspecting victims of this deliberate and personal attack,” he said.

While Mosley may have his supporters, inquiries by The Times suggest that there is also widespread revulsion at his behaviour, whether there was a Nazi connotation to it or not. The scandal has been discussed at boardroom level in most of the big car manufacturers and there have been rumours that a statement from several of them calling for Mosley's resignation has been considered.

The impression given by the manufacturers and the Formula One teams is that people are nervous about speaking out, fearing Mosley's wrath at a later date, should he remain in his post. In the meantime, there is bemusement that he has the nerve to continue. As one senior figure in Formula One put it: “How can you have a leader of industry, which is what Formula One is, who is a pervert?”

In the immediate future, Mosley has perhaps wisely chosen to stay away from this weekend's Bahrain Grand Prix, claiming that he is too busy with lawyers to make the trip. There is little doubt, however, that he has recognised that, as predicted by Bernie Ecclestone, Formula One's commercial rights holder, his presence would distract attention from the race and embarrass the Bahraini royal family.