The 15-year-old star of Disney series Hannah Montanna posed for the racy shot, which was taken by famed photographer Annie Leibovitz, for an upcoming issue of Vanity Fair.
Miley, who is on track to become a billionaire by the end of this year, is seen with a blanket wrapped round her chest, appearing to be naked underneath.
She said: "My goal in my music and my acting is always to make people happy. For Vanity Fair I was so honoured and thrilled to work with Annie.
"I took part in a photo shoot that was supposed to be 'artistic' and now, seeing the photographs and reading the story, I feel so embarrassed.
"I never intended for this to happen and I apologise to my fans, who I care so deeply about."
A source close to Miley said she was excited to be working with Leibovitz and added: "Her parents were there all day. Billy Ray shot too."
Parents Billy Ray and Tish left before the final shot, in which she appears to be topless.
But the source went on: "Miley's grandmother and her teacher were there when she shot it. Annie convinced them it was going to be artistic. Her parents are mortified. They know this is a learning moment for Miley.
"The photo suggests that she is naked but she is not. She is covered by a sheet but beneath the sheet she is clothed. Originally she was in a flesh-coloured tank top but was asked to remove it."
Miley has also apologised for a separate set of racy pictures which have been posted on the Internet, one showing her with a bare midriff, draped over the lap of her ex-boyfriend, another revealing a green bra.
She said of the online photos: "The pictures of me on the Internet were silly, inappropriate shots.
"I appreciate all the support of my fans and hope they understand that along the way I am going to make mistakes and I am not perfect.
"I never intended for any of this to happen and I am truly sorry if I have disappointed anyone.
"Most of all I have let myself down. I will learn from my mistakes and trust my support team.
"My family and my faith will guide me through my life's journey."
Vanity Fair was quick to deny claims that Miley was tricked in any way.
A spokesman said: "Miley's parents and/or minders were on the set all day.
"Since the photos were taken digitally, they saw it on the shoot and everyone thought it was a beautiful and natural portrait of Miley.
"In fact, when writer Bruce Handy interviewed Miley he asked her about the photo and she was very cheerful about it and thought it was perfectly fine."
But a spokesman for the Disney Channel, which broadcasts Hannah Montana, said: "Unfortunately, as the article suggests, a situation was created to deliberately manipulate a 15-year-old in order to sell magazines."
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