Louise Clifford, 42, said the anonymous letter which accused her father of assaulting a woman more than 35 years earlier, had been written by a "very disturbed, malicious person".
Giving evidence at London's Southwark Crown Court, Ms Clifford told the jury she felt an "atmosphere" when her father invited her to his office to read the letter.
"I knew something was amiss," she said. "He showed me, and said, 'I've received an anonymous letter.'"
Asked by defence barrister Richard Horwell, QC, what her father's reaction was to the letter, Ms Clifford said: "He was just nonplussed. Completely bewildered by it. It was obviously disturbing.
"It was the ranting of a mad woman. That was my reaction."
The court has heard the letter was written by a woman who claims to have been abused by Clifford after meeting him in Spain when she was 15 in 1977.
She is one of seven alleged victims of indecent assault in the trial.
During cross-examination, prosecutor Rosina Cottage, QC, suggested to Ms Clifford that the letter reads as though it is written from "someone hurt by your father".
Ms Clifford replied: "I think it reads like a very disturbed, malicious person."
Mr Clifford denies all the charges. The trial continues.