Book publisher Simon & Schuster may take legal action against The Associated Press for releasing excerpts from Sen. Hillary Clinton's (search) explosive memoir, sources said yesterday.

"Representatives of Simon & Schuster have been in touch with us," said David Tomlin, assistant to AP's president. "We disagree completely with their legal conclusions concerning our story."

The AP story ran Tuesday night and hit the front pages of yesterday's editions of the world's newspapers, including The Post.

The "AP obtained the book by good old-fashioned reporting," said another spokesman for the wire service.

Simon & Schuster would not comment on the possibility of a lawsuit, saying only, "The use of our book by [the] AP was inappropriate and a violation of our strict embargo and the national on-sale date."

Clinton's book, Living History (search), is slated to go on sale Monday.

Time magazine, which had teamed up with People to pay $100,000 for first rights to excerpt the book, is contemplating backing out of the deal.

"I'm reviewing my options," said Time managing editor Jim Kelly.