OTTAWA (AFP) - Toronto's embattled mayor said on Thursday he will sue former staff, a bar waiter and others who claimed to have seen him snorting cocaine and partying with a possible prostitute.

The allegations contained in police documents released on Wednesday also suggest Mr Rob Ford used the pain killer Oxycontin, drove while inebriated and had his staff buy alcohol.

The allegations, which were compiled over a period of months, have not yet been proven in court and were used to obtain a search warrant in an investigation of Mr Ford's friend Alessandro Lisi, who faces drug and extortion charges.

"It's unfortunate I have to take legal action," Mr Ford told reporters outside his office, denying the allegations as "outright lies".

"I have no other choice," he said. "I'm the last one to take legal action. I can't put up with it any more. So I have named the names. Litigation will (be) starting shortly."

Mr Ford said his former chief of staff and two other former underlings were the source of the file's vivid depiction of one night in particular: St Patrick's Day in 2012.

The three staff were among revellers with Mr Ford, who started partying at the Mayor's City Hall office. One of them said he saw a petite blonde blue-eyed woman named Alana, who he said he believed was a sex worker.

The staffer told police that there had been rumors that Mr Ford "had used escorts or prostitutes", that Alana had previously been seen with Mr Ford "at a stag party," and that she had hash and marijuana.

"It hurts my wife when they are calling a friend of mine a prostitute. Alana is not a prostitute. She's a friend and it makes me sick how people are saying this," said Mr Ford.

"I'm very happily married at home," he said. "It (also) hurts my wife when they are calling a friend of mine a prostitute."

According to the police documents, the party later moved to a private room at a local bar, where a server claimed he saw the mayor and another woman "turned in towards each other with their heads down and back from the table and he heard two sniffs from both of them".

Mr Ford rejected this account, as well as claims that over the course of the night, he had said lewd words to a female policy advisor and a female City Hall security guard.