The corporation denies that the singer is entitled to the compensation he is claiming following publicity about a raid on his apartment in Sunningdale, Berkshire, by South Yorkshire Police.
Detail of the BBC’s defence has emerged in paperwork lodged by lawyers at the High Court in London pending the start of any court hearings.
The singer has sued the BBC and the South Yorkshire force in the wake of coverage of the raid in in August 2014, and says the BBC added “insult to injury” by entering its coverage in a “Scoop of the Year” journalism contest.
Lawyers representing Sir Cliff allege that South Yorkshire Police contravened guidance on “relationships with the media”, in its dealings with BBC reporters.
The BBC’s lawyers acknowledged in a written “defence” that the singer had suffered distress, and that managers had apologised, but they disputed compensation claims.
“It is denied that the claimant is entitled to damages or compensation as alleged at all,” said Gavin Millar QC, who is heading the BBC’s legal team.
“It is admitted that the claimant suffered distress.”
He added: “The BBC has already told the claimant it is very sorry that this was the case.” he suffered “profound and long-lasting” damage.
Sir Cliff’s lawyers say he has sold the apartment which was raided because the prospect of living somewhere which had been “so publicly violated” distressed him.
They also say he has run up more than £1m in lawyers’ bills.
Paperwork shows that the 76-year-old singer is claiming “very substantial” damages.
Lawyers say the BBC broadcast a “major story” on the day of the raid by agreement with South Yorkshire Police.