Donald Trump and his foundation being sued by New York for 'illegal conduct' including support of his 2016 presidential campaign

US President Donald Trump and his namesake foundation have been sued by the New York State Attorney General Barbara Underwood, with the president attacking "the sleazy New York Democrats" in response and vowing not to settle.

Underwood says the non-profit organisation should be dissolved after supporting Trump's 2016 US presidential campaign and more than 10 years of illegal conduct.

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She accused the foundation's directors of "extensive unlawful political coordination" with the Trump campaign, and "repeated and wilful self-dealing" to benefit the personal and business interests of the president.

Following the accusations, Trump attacked "the sleazy New York Democrats" on Twitter.

"The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won't settle this case!" he wrote.

Trump's children were also named as defendants in the petition, which was filed in the New York State Supreme Court.

New York is seeking a 10-year ban on Trump serving as a director of a New York non-profit, and one-year bans for his children Donald Jr, Eric and Ivanka as well as NZ$4.1 million ($US2.8 million) of restitution plus penalties. 

FILE - In this July 23, 2014 file photo, Donald Trump, right, sits with his children, from left, Eric Trump, Donald Trump Jr., and Ivanka Trump during a ground breaking ceremony for the Trump International Hotel in Washington. New York's attorney general filed a lawsuit Thursday, June 14, 2018 accusing  Trump of illegally using money from his charitable foundation to settle disputes involving his business empire and to burnish his image during his run for the White House. The president blasted the case as politically motivated. The lawsuit seeks $2.8 million in restitution and the dissolution of the foundation. (AP Photo/Evan Vucci, File)
Donald Trump and his children, Ivanka Trump (centre) and Donald Trump Jr (left) were named defendants in the petition. Source: Associated Press