Prince Harry is suing Associated Newspapers Limited (ANL) for libel over a February article about a dispute over his family's security arrangements.
His barrister said the story falsely suggested he had "lied" and "cynically" tried to manipulate public opinion.
But ANL said it contained "no hint of impropriety" and was not defamatory.
The story, published in the Mail on Sunday and online, referred to the prince's separate legal case against the Home Office over security arrangements when he and his family are in the UK.
In a written statement to Thursday's preliminary hearing, Prince Harry said it had caused him "substantial hurt, embarrassment and distress, which is continuing".
The prince's barrister Justin Rushbrooke said the article suggested he had "lied in his initial public statements" by claiming to have always been willing to pay for police protection in the UK. The story suggested "he had only made such an offer recently, after his dispute had started and after his visit to the UK in June 2021", Mr Rushbrooke said.
He added that the Mail on Sunday story claimed he had "improperly and cynically tried to manipulate and confuse public opinion by authorising his 'spin doctors' to put out false and misleading statements about his willingness to pay for police protection immediately after the Mail on Sunday had revealed he was suing the government".