Busta Rhymes has hit back at a fan who appeared to call him a homophobic slur.

In footage obtained by TMZ.com, which takes place in New York in the early hours of Wednesday morning, the rapper can be seen arguing with a couple of men wearing construction crew reflective vests.

In the clip, which begins part-way into the exchange, the group are also surrounded by New York Police Department officers.

While both sides appear to be shouting at one another, Busta confronts one of the men up close, at which point they call the 47-year-old a "f**got", causing the star to retaliate and cops to step in.

Law enforcement sources told the publication one of the construction workers filed a harassment report later that evening, claiming the What's It Gonna Be?! hitmaker was the main aggressor in the fight.

The man alleged Busta, real name Trevor George Smith, Jr., swung at him but made no contact, and told him "I will f**k you up" after he attempted to greet the musician.

He reportedly felt threatened and dropped his phone because he was scared.

Sources told the outlet there will be no further investigation and the case has since been closed.