In a lead story The Sun claimed the Life Guards troopers, members of the British Army's most senior regiment, staged the late night orgy less then two kms from Buckingham palace. They then distributed copies of the video among colleagues.
A full-scale probe has been launched into the murky episode by commanding officer Lt Col Valenone Woyks.
"I am investigating this with the greatest rigour to establish the facts and deal with any offence committed," Lt Col Woyka said.
According to the report five troopers took part in the late-night
Other men wandered in and out, with a total of nine appearing in the film-though some were just onlookers.
After videoing their antics at London's Hyde Park Barracks they distributed a handful of copies to other members of the Household Cavalry Mounted Regiment, which is made up of the Life Guards and the Blues and Royals.
Trooper Ivon Blevins, 22, was the ringleader who smuggled the girl into the barracks last Wednesday, the report said.
If found guilty the punishment could range from a fine and loss of promotion opportunities to being kicked out of the Army altogether, The Sun said.