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In an exchange with Philippa Jackson, representing Stella English at employment tribunal, Lord Sugar accused his former employee of lying about her version of events to generate publicity.
When Ms Jackson suggested he appeared angry, he said: "I'm angry because of this, because it's a total lie".
"When I came into the process of this tribunal, I was going to try to be generous to your client, but I've sat here and listened to her over the past two days and there is no other way to describe what she has said than as blunt lies."
At times Lord Sugar was irate as he spoke at the constructive dismissal hearing, at one point saying he wished he has employed another contestant "instead of her" pointing at Stella English.
In response to Ms English's accusation that referring to her, he said: "Nice girl, don't do much", Lord Sugar said:
"Absolute garbage, total garbage...why would I make a statement like that which is tantamount to an insult."
He also dismissed other claims by the 34-year-old as "total nonsense, lies, blunt lies".
Lord Sugar has accused one of his Apprentice winners of lying and taking him to a tribunal "to extract money". Stella English won the TV show in 2010, but is suing the businessman for constructive dismissal.
ITV News UK Reporter Sejal Karia is at the East London Employment Tribunal.
Lord Sugar has dismissed a former winner of the BBC's The Apprentice's claim that she been an "overpaid lackey" at his IT division Viglen and later pressurised to take another role.
Appearing at a tribunal where she is suing him for constructive dismissal, the entrepreneur said Stella English's allegation was "total garbage".
He added that her claim that she was ostracised by colleagues at Viglen was "a figment of her imagination".
The entrepreneur also said Ms English's claim that he told her he "didn't give a s***" was another example of her being "deluded".
Lord Sugar condemned a "claim culture" today as he accused a winner of his TV show The Apprentice of lying and taking him to a tribunal to get money.
He said Stella English's constructive dismissal claim "together with its publication in the media, is simply an attempt to extract money from me."
Lord Sugar also said Ms English wrongly believed he was "scared" of articles about him or The Apprentice appearing in the press.
"I seriously believe the claimant is deluded that I'm frightened about newspaper articles and that I would not appear at a tribunal as a witness."
He said Ms English was under the impression he would pay her off to avoid having to attend the hearing.
But he told the tribunal: "I have no intention to pay her any money unless told to do so by the law."
During cross-examination today 2010 Apprentice winner Stella English was asked by Seamus Sweeney, representing Lord Sugar, why she did not complain to the millionaire business mogul about how she was treated.
She said: "I was in a trial period to win The Apprentice.
"What value is there in me going into a company I don't know - whether I knew (she was going to win) or not - and then go and complain about people who have been working there a long time?"
The tribunal also heard that Ms English later asked Lord Sugar about how to get media advice on doing some public speaking or writing a book as she needed to make some money as she was in debt.
Ms English, who took home £82,500 a year in her previous job working for a Japanese investment bank, said Lord Sugar told her it would be "better all round that you didn't walk out".
Latest ITV News reports
Entrepreneur Lord Sugar has accused a former winner of his TV series The Apprentice of being a liar and attempting to blackmail him.
The 2010 Apprentice winner said she was just an "overpaid lackey" in the job she was given by Lord Sugar, an employment tribunal heard.