Steve - who won the very first 'X Factor' - says he was cornered in Simon's dressing room by Sinitta and former glamour model Jackie St Clair just hours before the final in 2004, in his new autobiography 'Getting Over The X'.
He says he was trying calm his nerves ahead of the final when the 'X Factor' judge summoned him to his dressing room.
"Simon just sat there smoking and grinning," he recalled "Jackie St Clair opened her long coat. That left just a little thong and high heels. It was impossible to avoid her breasts as she strutted towards me. Then Sinitta followed behind.
"Both had me up against the dressing room door. Sinitta undid her top and they began to touch me. Simon just sat there beaming."
The singer, now 46, said both women finally backed off after he told them to stop, and he then ‘tore into’ Cowell, who told him he was trying to ‘relax’ him.
Steve said the incident had brought back memories of being abused as a teenager.
"Over and over in my mind were his words that he was trying to relax me, but for me this was the beginning of the end," he said.
Steve went on to be crowned the 'X Factor' winner but he parted ways with Simon Cowell's record label just nine months later and has subsequently been written out of 'X Factor' history.
A spokesman for Cowell declined to comment.
Meanwhile, this year's 'X Factor' finalists are gearing up for the show's climax this weekend.
Fleur East is favourite to win the singing competition, ahead of Ben Haenow and Andrea Faustini.