The 35-year-old cage-fighter is said to have left the former glamour model - who he married in Las Vegas 11 months ago - in tears after insisting he won`t movie out of their marital home and sign a confidentiality agreement unless she pays the huge sum.
A source told The Sun newspaper: "Most people haven`t seen Katie cry, but she was in fits after this call. Alex had finally agreed to release a statement about the end of their marriage and move out. He then went to the gym. Katie called him to see if he had run everything past his lawyers and he just started to laugh.
"Alex said he had changed his mind and that there was absolutely no way she was getting rid of him that easily."
Katie - who has children Harvey, eight, Junior, five, and Princess Tiaamii, three from previous relationships - is said to have considered walking away from the property in Surrey, Southern England, but the house has been specially adapted for the needs of her disabled eldest son but Alex was reportedly unsympathetic to her appeal.
An insider said: "He is angry, and refusing to pack up his bags and leave. Kate pleaded with him on the phone to leave the house for the sake of her family, and he laughed, and said: `That`s your problem,` before hanging up. Katie even brought her disabled son, Harvey, into the equation, explaining he could not be moved from the house because of his special needs. But again Alex was, literally, unmoved."
Katie - who is believed to have offered Alex a £250,000 settlement - is furious over her spouse`s demands for money, particularly as she feels he has made more from their relationship than he would have done alone, but is concerned he will give tell-all interviews about their marriage if she doesn`t comply with his request.
The source told the Daily Mirror newspaper: "He doesn`t even pay or contribute towards the mortgage so it is particularly galling for Kate. Another major worry is that he`s refusing to be gagged. The implication is that he could reveal very private details about their life together and profit off the back of her. Kate is absolutely furious and simply doesn`t know how this situation is going to get resolved. It`s growing increasingly hostile."
At the weekend, a spokesperson confirmed the couple had planned to release a statement announcing the end of their marriage, but it was scrapped at the last minute after Alex begged his wife to reconsider.