The bankrupt star is believed to have yelled at McHugh: "You've ruined my life."
The Sun quoted an insider as saying: "She had been through her accounts and was raging. She went to his office to speak to him and was screaming and kicking off. Then she punched him in the face. David started yelling back so she grabbed a cup of tea and threw it in his face - and punched him in the chops again for good measure."
It is reported that a fuming Katona drove away from McHugh's office in Warrington, Cheshire, after the alleged attack. McHugh immediately called up the cops informing them of the assault. Four police officers soon arrived at Katona"s Wilmslow home and took her to the police station for questioning. She was released after nearly eight hours.
The source aid: "Kerry's sick of people taking the mickey out of her, but she is supposed to be cleaning up her image - not getting banged up for beating people up."
Interestingly it was only 48 hours earlier that the former Atomic Kitten had been cautioned by the police for possessing cocaine.
Another close aide said: "Kerry's whole world is imploding. She was in pieces after the police grilled her for almost two hours on Monday and this is the last thing she needs. For the sake of her sanity and her children, she really needs to seek help. Her whole life is spiralling out of control."
Katona was released on bail but she will have to appear before the cops once again for further questioning.
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