The supermodel - who has been dating The Kills rocker for two years -reportedly slept with Eve Berlin of American band Living Things after meeting the group in Germany last summer.
Eve's brother, the band's singer Lillian revealed: "Walking in on my brother and Kate Moss with their clothes off, that was very awkward.
"I don't like to look at my brother naked. Between my brother being naked and seeing Kate Moss naked with my brother, that was very awkward."
According to Lillian, the encounter took place last June but when asked the status of Kate's relationship with Jamie at the time, he replied: "No comment. What he doesn't know won't hurt him."
Kate hit it off so well with the group they were asked to appear with her in a photo shoot for Roberto Cavalli's Just Cavalli fashion label.
Lillian added to take40.com: "We thought, 'Let's take some money from these rich f**ks and go buy some musical equipment.'
"F**k it, I'll sit there next to Kate Moss holding a guitar and go collect $10,000 each."
Kate and Jamie's relationship was rumoured to be in trouble last July over the strain of him being away on tour.