The swimming champ was celebrating his 20th birthday party with pals in Sin City when the Brit challenged him to a water dash.

  Lochte says, ""We were actually at the same pool - the pool party called Xcess... I had no idea he was there and his people came over to my table and said, 'Do you wanna meet Prince Harry?'

  ""I walked over and I met him and I shook his hand and he said, 'Hey, you wanna go and race me...?' I was like, 'All right, I gotta go get my (swimming gear)...' He goes, 'No, we're going right now.'

  ""So we dove in, fully clothed and everything. Before we went in, I was like, 'Do you really wanna lose?'""

  But Lochte insists he stopped partying with the prince after he beat him in the pool - and he was not part of the hotel suite revelry, during which the royal stripped off and was photographed cavorting with a mystery woman around a pool table.

  Appearing on Late Night with Jimmy Fallon in America on Friday night (24Aug12), Lochte added, ""All we did is race in the swimming pool; we didn't do any of the other pool encounters.""