Larry King's family is disgusted that he DENIED wife's affair #HNNLove

(Time Magazine)

Just a day after news broke that Larry King's wife Shawn allegedly cheated on him, the talk show host went on television to deny the scandal ever happened – and now his kids are furious.

"It was a sham interview," says a source of the Kings' appearance on Home & FamilyThursday. "His kids are disgusted and outraged."

During the interview King, 82, addressed his wife's alleged yearlong affair, chalking it up to "rumors" and saying, "I don't pay any attention to them."

But a source tells PEOPLE Shawn, 56, and her father, Karl Engemann, put Larry up to the denial, which didn't sit well with the TV legend's family.

"They are controlling his mind," adds the source. "This is another example of Shawn's manipulation."

As for what will happen next?

"It could go either way," says the source. "Behind closed doors he's embarrassed and humiliated and when he gets around her she clearly has something on him. She's holding something over him. I wouldn't be surprised if they continue to live as they do and just co-exist."

Neither Engemann nor Shawn have responded to PEOPLE's requests for comment.

With files from MSN