The comic is taking on the role in an as-yet-untitled movie about Raymond's life, alongside Anna Friel, who will play his wife.
Coogan has already been embroiled in a legal battle with Raymond's son Howard over the name of the film, and now the porn boss' granddaughter Cheyenne reveals she is less than impressed that the Tropic Thunder star is playing her beloved grandfather.
She tells British newspaper Daily Mail, "I am not a fan of Steve Coogan. He doesn't appeal to my sense of humour and I would not have chosen him to play my grandfather.
"I was very close to my grandfather and they don't look similar at all. Just because you put someone in a collar and a big coat, it doesn't mean they look like them."
Howard Raymond is making a rival film, The King of Soho, with The Avengers star Tom Hiddleston in the lead role.
A slew of U.K. celebrities, including actors Hugh Grant, Jude Law, Sienna Miller and Steve Coogan, previously learned their privacy had been compromised after a private detective working for the now-defunct tabloid intercepted voicemail messages from their cell phones, and on Tuesday (24Jul12), it was revealed that Pitt and Jolie had also been caught up in the controversy.
It is not known to what extent the Hollywood supercouple had been targeted.
The news emerged as prosecutors in London announced that eight people, including former News of the World editor Rebekah Brooks, will face criminal charges relating to the scandal, which took place between 2000 and 2006.
The suspects are due to appear at Westminster Magistrates' Court on 16 August (12) to answer the charges.
The collapse of the News of the World prompted the launch of The Leveson Inquiry, a wide-ranging investigation into press ethics in Britain, last year (11).
The Tropic Thunder star was hit with a court summons after his Land Rover vehicle was recorded travelling nine miles-per-hour (14.4 kilometres-per-hour) above the speed limit on a road near his home in Hove, England in October last year (11).
The actor took five months to name his friend Jodie Bailey as the driver of the vehicle on the day concerned, far beyond the 28-day limit set down by law.
But Coogan told Brighton Magistrates Court on Monday (16Jul12) that the vehicle was a pool car used by up to 20 of his family and friends, and he was so "exceptionally busy" it took him five months to remember lending the car to Bailey on the day of the offence.
Bailey, who was visiting Britain from Australia at the time, has admitted being at the wheel when the speeding offence was committed.
Coogan was cleared of a charge of failing to provide the driver's identity.
The Tropic Thunder actor reteamed with his 24 Hour Party People filmmaker Winterbottom for the movie, initially called Paul Raymond's Wonderful World of Erotica.
Its name was subsequently changed to The King of Soho, but Raymond's son Howard filed suit over the title, arguing that he had already trademarked the name for a rival production based on his dad's life.
Winterbottom has since backed down and will change the title of his project, allowing Howard to press ahead with his The King of Soho production, starring The Avengers star Tom Hiddleston in the lead role.
Howard Raymond says, "I am delighted that Michael Winterbottom has agreed to change the name of his film. It was causing a huge amount of confusion in the media that two films were being made about my father under the same title."
Winterbottom's movie, scheduled for release next year (13), is currently in post-production and a new name will be announced "in due course".
Raymond opened the U.K.'s first strip club, Raymond Revue Bar, in 1958. He also published the magazines Razzle, Mayfair and Men Only. He died in 2008.
The Tropic Thunder star's Range Rover was clocked by a speed camera exceeding the 30 miles-per-hour (48 kilometres-per-hour) limit in Hove, south-east England in October (11).
He allegedly failed to tell police who was at the wheel of the car, and his lawyer told a court this week (begs02Apr12) that Coogan intends to plead guilty to a charge of failing to provide the driver's identity.
The offence carries six penalty points, which would take the comedian to the 12-point threshold for disqualification, reports Britain's Daily Mirror.
The star's legal representative has written to Brighton magistrates declaring the star was not driving. The case was adjourned until next month (May12).
Apparently, people like porn. That's what the movies are telling us anyway. Aside from the two Linda Lovelace biopics in development, there is also a project in the works telling the story of Paul Raymond, New York-based pornography publisher and strip club owner. The film is called King of Soho, and stars the always-on Steve Coogan as the central figure. Variety reports that the movie has roped in three young actresses from the United Kingdom to join the cast: Imogen Poots, Anna Friel and Tamsin Egerton.
Imogen Poots' name might be the most familiar, thanks partially to its whimsical quality. Her recent credits include Fright Night and Jane Eyre. Anna Friel starred alongside Bradley Cooper in last year's Limitless. Finally, Tamsin Egerton is associated mostly with British pictures like 2011's Chalet Girl.
King of Soho will take a comical and dramatic look at Paul Raymond's life and work. The film is being directed by Michael Winterbottom (Coogan-starrer 24 Hour Party People).
The funnyman was targeted by a private investigator working for the now-defunct British tabloid and his cell phone voicemail messages were allegedly intercepted.
Coogan had been one of the leading lights in a campaign to expose practices at the Rupert Murdoch-owned Sunday newspaper, and on Wednesday (08Feb12) he was among a group of nine claimants who agreed a settlement with parent company News International.
Others stars involved in the case include former England soccer ace Paul Gascoigne, who accepted $108,800 (£68,000) in damages - but London's High Court heard singer Charlotte Church is still pursuing her legal action against the newspaper's owners.
The actor sparked outrage from victims' relatives after signing up to portray the monster in TV movie Appropriate Adult, which dramatises West's arrest on 11 murder charges in 1994.
But the two-part programme has been lauded by a jury of journalists and critics - it was named the Best Single Drama at the prizegiving in London on Thursday (02Feb12).
Hit period show Downton Abbey continued its winning streak after it was crowned Best Drama Series, while The Inbetweeners picked up the Best Comedy Programme honour.
Comedians Steve Coogan and Rob Brydon's show The Trip was voted Best New Programme.
Macpherson is said to be one of a slew of victims targeted by a private investigator, who intercepted voicemail messages from cell phones belonging to celebrities and crime victims and allegedly passed on juicy information to editors at the News of the World.
A public inquiry into U.K. press standards is underway in London, and on Tuesday (22Nov11), Macpherson's former employee Mary-Ellen Field testified that she had lost her job after the beauty blamed her for sharing her secrets with the press.
Field claimed her relationship with the Aussie stunner began to fall apart as a result of the false accusations in 2005 - all while she was battling a mystery illness.
She told the panel at the Royal Courts of Justice, "It had a very serious affect. I had become ill and was falling down all the time."
Macpherson believed her assistant was simply intoxicated and ordered her to undergo counselling for alcoholism - but instead of protesting her innocence, Field agreed to go to rehab to keep her job.
She explained, "I have a severely disabled child who can never look after himself, so walking away from a high-paying position is not a good idea."
Earlier in the day, comedian Steve Coogan also testified in the ongoing government inquiry into tabloid ethics, insisting the British media had no right to expose scandals in his personal life because he has never courted the press attention.
Publishing boss Rupert Murdoch closed the News of the World earlier this year (11) after the phone hacking controversy hit headlines around the world.
The two stars have become close friends and appeared onscreen together in Hollywood movies including Night at the Museum.
Following reports Wilson had been hospitalised after a suicide attempt in 2007, a British newspaper ran an article suggesting Coogan had some connection to the incident.
Now Coogan has spoken out to explain why he merely issued a "curt denial" of the story and didn't pursue legal action, insisting he did not want to make Wilson's situation worse.
Giving evidence at a public inquiry into the British media in London on Tuesday (22Nov11), Coogan told the hearing, "There is absolutely no truth in the allegation. I had not been on the same continent as Owen for nine months prior to this episode, and I've never taken drugs with him or in his presence...
"Primarily, I didn't want to give the story legs and my chief concern was my friend, at that time. I didn't want to shine a light on him when he was in that vulnerable state. I thought any emphatic courting of the press to protest my innocence, beyond that short, curt denial, would make life difficult for him."
The inquiry into press standards in the U.K. was sparked by the News of the World phone hacking scandal earlier this year (11), when the tabloid was shut down following allegations a private investigator working for the newspaper intercepted voicemail messages from cell phones belonging to crime victims.