Prince is in discussions with fan-run websites after threatening legal action unless photographs of him were removed.
Prince recently performed for 21 nights at London's O2 arena
In a statement, the singer denied he was trying to penalise fans and said he was "simply looking to provide Prince fans with exclusive music and images".
Fan groups said they were hopeful for a resolution but would continue to fight if talks were unsuccessful.
In September, Prince took action against video sharing website YouTube to remove clips of his London concerts.
The statement added that the request to remove the star's pictures was not to shut down fan sites or control comment in any way, but to bypass "unofficial and unauthorised fan sites that exploit both consumers and artists".
It said: "The issue was simply to do with copyright and trademark of images and no lawsuits have been filed."
But a spokesman for fan group Prince Fans United said they were "baffled" by the statement released by the singer's promoter.
"We were told this statement would not be sent out as we thought we were going to settle this dispute - Prince would stop the legal threats, the fan site would continue and more co-operation would begin between Prince and his fans."
"This statement potentially destroys everything we agreed in the last 24 hours," he added.
As a goodwill gesture, Prince sent a new track to fan-sites, apparently recorded the night before.
"It's an old track, but he re-did the lyrics to be more appropriate for the situation," the Prince Fans United spokesman said.
He added that as the non-profit making websites in question were run by fans, any suggestion they were trying to exploit consumers and artists was ridiculous.
Prince Fans United was formed by housequake.com, Princefams.com and Prince.org, to fight back against Prince's legal notices.