16 May 2011 Last updated at 05:48 ET
The reports have led to widespread criticism on the internet.
This is more bad publicity for the palace, following a break-in last week in which valuable items were stolen.
Media reports suggest wealthy people can buy membership to the exclusive club for $150,000 (£92,600).
This allows them access to the Forbidden City's Jianfu Palace, which translates as Palace of Established Happiness.
The Jianfu Palace was originally built in 1740 by the Emperor Qianlong. This section of the Chinese emperors' former home was destroyed in 1923 by fire started in mysterious circumstances.
It was painstakingly restored six years ago using money donated by a Hong Kong businessman.
Private club An anonymous web user has posted online what they say is an application form to join the club.
The fax number on the bottom of the form is registered to a company that is in charge of day-to-day maintenance of the Jianfu Palace.
There has been intense speculation about the story on the internet, with many critical comments.
Rui Chenggang, a national TV presenter, wrote on his blog: "A foreign tour guide proudly told me that he just arranged a family dinner party for an American billionaire."
The Forbidden City authorities deny the claims.
They say the Jianfu Palace is used for exhibitions, seminars and press conferences - and to welcome visiting dignitaries.
"It is not, and could not, be used as a so-called top-class private club for rich people," read at statement on the Forbidden City's official blog.
The historic site already finds itself uncomfortably in the spotlight.
Last week a thief stole seven items that had been borrowed from a private collection in Hong Kong. Officials admitted to a lapse in security.
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China row over Forbidden City 'club for the rich'
The Chinese authorities say the Forbidden City is not being used as a top-class private club for the rich
Chinese officials have denied the Beijing palace that was once home to China's emperors is being used as a club for the rich.
Chinese media reports claim wealthy people can buy access to a restored section of the Forbidden City to entertain family and friends.The reports have led to widespread criticism on the internet.
This is more bad publicity for the palace, following a break-in last week in which valuable items were stolen.
Media reports suggest wealthy people can buy membership to the exclusive club for $150,000 (£92,600).
This allows them access to the Forbidden City's Jianfu Palace, which translates as Palace of Established Happiness.
The Jianfu Palace was originally built in 1740 by the Emperor Qianlong. This section of the Chinese emperors' former home was destroyed in 1923 by fire started in mysterious circumstances.
It was painstakingly restored six years ago using money donated by a Hong Kong businessman.
Private club An anonymous web user has posted online what they say is an application form to join the club.
The fax number on the bottom of the form is registered to a company that is in charge of day-to-day maintenance of the Jianfu Palace.
There has been intense speculation about the story on the internet, with many critical comments.
Rui Chenggang, a national TV presenter, wrote on his blog: "A foreign tour guide proudly told me that he just arranged a family dinner party for an American billionaire."
The Forbidden City authorities deny the claims.
They say the Jianfu Palace is used for exhibitions, seminars and press conferences - and to welcome visiting dignitaries.
"It is not, and could not, be used as a so-called top-class private club for rich people," read at statement on the Forbidden City's official blog.
The historic site already finds itself uncomfortably in the spotlight.
Last week a thief stole seven items that had been borrowed from a private collection in Hong Kong. Officials admitted to a lapse in security.
*******************************************************************************
17 May 2011 Last updated at 04:06 ET
Potential club members were apparently invited to a lavish opening ceremony inside the Forbidden City.
Media reports say they were being charged $150,000 (£92,600) each to join the club.
Photographs of the opening ceremony have been posted online.
They show attendants dressed as ancient warriors, as they might have done when emperors strolled the palace corridors.
Valuable museum pieces were said to be on display for the special guests, who dined on delicacies such as double-boiled superior fungus with Chinese herbs.
Another picture shows a welcome note prepared by the organisers. It says the club is intended as a meeting place for the "wise elites" in society.
The Forbidden City authorities say the club was being organised without their knowledge by the Beijing Palace Museum Royal Court Cultural Development Company, a firm linked to the museum.
"It made its own decision without approval from us to expand customer services and release membership invitation forms," the Forbidden City said in a statement.
Plans to go ahead and recruit members have now been scrapped.
The private club was being organised in the Jianfu Palace, a section of the Forbidden City that was built by the Emperor Qianlong in the 18th Century.
It burnt down in 1923 and was restored after several years of painstaking work in 2005, with money donated by a Hong Kong businessman.
The Forbidden City, in the heart of Beijing, was home to China's emperors in the Ming and Qing dynasties.
China's Forbidden City admits plans for 'rich club'
The Forbidden City authorities now say there were plans for a private club inside the palace
Officials at the former home of China's emperors have admitted that there were plans to open an exclusive private club inside the palace.
They had initially denied the historic site was being used for private profit.Potential club members were apparently invited to a lavish opening ceremony inside the Forbidden City.
Media reports say they were being charged $150,000 (£92,600) each to join the club.
Photographs of the opening ceremony have been posted online.
They show attendants dressed as ancient warriors, as they might have done when emperors strolled the palace corridors.
Valuable museum pieces were said to be on display for the special guests, who dined on delicacies such as double-boiled superior fungus with Chinese herbs.
Another picture shows a welcome note prepared by the organisers. It says the club is intended as a meeting place for the "wise elites" in society.
The Forbidden City authorities say the club was being organised without their knowledge by the Beijing Palace Museum Royal Court Cultural Development Company, a firm linked to the museum.
"It made its own decision without approval from us to expand customer services and release membership invitation forms," the Forbidden City said in a statement.
Plans to go ahead and recruit members have now been scrapped.
The private club was being organised in the Jianfu Palace, a section of the Forbidden City that was built by the Emperor Qianlong in the 18th Century.
It burnt down in 1923 and was restored after several years of painstaking work in 2005, with money donated by a Hong Kong businessman.
The Forbidden City, in the heart of Beijing, was home to China's emperors in the Ming and Qing dynasties.
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