Thomas Markle could be called to give evidence against his daughter Meghan, the Duchess of Sussex, in the UK's high court, the Daily Mail reported on Wednesday.
The Daily Mail is the sister newspaper to the Mail on Sunday, which is being sued by the Duchess over its publication of a private letter she wrote to her estranged father criticising his treatment of her.
Documents filed to the high court by the Mail on Sunday on Tuesday, which have been seen by The National, argue that there is a "huge and legitimate" public interest in publishing the letter.
Meghan's half-sister Samantha Markle told the BBC that her father would tesitfy in the case against her "if he is called".
The development in the legal case comes a week after Meghan and her husband Prince Harry announced they would be stepping back as senior members of the British royal family.
Law firm Schillings, acting on behalf of Meghan, filed a High Court claim in October alleging misuse of private information, copyright infringement and breach of personal data after the newspaper published extracts from a letter she sent to her father in August 2018.
In their 44-page defence filing to the court, the Mail on Sunday claims that Meghan and other members of the royal family "rely on publicity about themselves and their lives in order to maintain the privileged positions they hold and promote themselves". It adds that the Duchess could not "have a reasonable expectation of privacy that the contents of the letter were private and would remain so".
Dismissing the copyright infringement claim, the newspaper says in its filing that Mr Markle gave them the letter after an article defending the Duchess appeared in US magazine People which made reference to the letter.
The article quoted five unnamed friends of the Duchess, which the Mail on Sunday claims Meghan herself must have "authorised or acquiesced to the disclosure of the fact and nature of the Letter to People magazine".
The Mail on Sunday said that Mr Markle "had a weighty right to tell his version of what had happened between himself and his daughter including the contents of the letter".
The documents also include the content of text messages from Mr Markle to Meghan sent in the days before her wedding to Harry in May 2018. The publication of the highly personal messages has led commentators to suggest that the newspaper’s court filing was made with cooperation from Mr Markle.
The Daily Mail said Mr Markle, a 75-year-old former Hollywood lighting director, "expected to be called as a key witness" should the case be brought to court.
Meanwhile, Meghan was seen publicly for the first time since returning to Canada last week at a women's centre in Vancouver.
The Downtown Eastside Women's Centre posted a photograph to Facebook of the Duchess with staff on Tuesday, adding that she had visited "to discuss issues affecting women in the community".
Her husband Harry is still in the UK, where he is expected to attend an official event at Buckingham Palace on Thursday.
Harry had talks with his grandmother Queen Elizabeth on Monday after which the British monarch released a statement saying she accepted the Sussexes’ decision to step back as senior royals.