A respected TV producer accused of trying to blackmail chat show host David Letterman for $2m (€1.3m) was desperate and deep in debt, prosecutors said.

The alleged plot forced the late-night comic to admit on his CBS Late Show to having sex with women who worked for him.

A handcuffed Robert 'Joe' Halderman, a producer for the true-crime show 48 Hours Mystery, pleaded not guilty when he appeared in a Manhattan court on?Friday, charged with attempted first-degree grand larceny, punishable by five to 15 years in prison. Bail was set at $200,000 (€130,000).

Halderman's connection to Letterman was not immediately clear, but public records show that until August, he lived in Norwalk, Connecticut, with Stephanie Birkitt (34) who works on the Late Show and used to work at 48 Hours Mystery.

Birkitt, an assistant to Letterman on the Late Show, frequently appeared on camera with the host in comedy bits. Last month she moved to Manhattan's upper West Side. There was no answer yesterday at a phone listed in her name. Assistant district attorney Judy Salwen told the judge yesterday that Halderman was in debt.

"The evidence is compelling," she said. "It shows the defendant is desperate, and he is capable of doing anything."

The prosecutor said Halderman gave the talk show host a package of materials that "contained clear, explicit and actual threats that indicate this defendant... [wanted to] destroy the reputation of Mr Letterman and to submit him and his family to humiliation and ridicule."

Jay Leno, Letterman's long-time late-night rival, did not waste a moment commenting on the situation.

He kicked off his monologue on NBC's The Jay Leno Show early today, with: "If you came here tonight for sex with a talk show host, you've got the wrong studio."

Halderman stared at the floor during most of the court hearing and said only: "Not guilty."

His lawyer, Gerald Shargel, said Halderman worked at CBS for 27 years and had no prior criminal record. He described him as an involved father who coached soccer, baseball and football and had two children, aged 11 and 18.

"This story is far more complicated than what you heard this afternoon," Shargel said outside court.

Commentators quickly accused Letterman of hypocrisy because he has made a career of mocking politicians mercilessly for their sexual transgressions. It remains to be seen whether he will suffer long-term damage just as his career appears to be peaking. All of the affairs took place before his marriage, said Tom Keaney, spokesman for Letterman's production company, Worldwide Pants.