The Nigerian Football federation says lesbians have not been banned from playing in the West Africa country.
It had been reported that football's world governing body Fifa had written to the NFF, seeking clarification over the situation.
NFF spokesman Ademola Olajire told BBC Sport: "Unfortunately, a section of the media has blown petty speculation out of proportion.
"The NFF never received any letter or query from Fifa."
The issue came to light when it was reported that Dilichukwu Onyedinma, the chair of the Nigeria Women Football League (NWFL), said lesbian players would no longer be eligible for the Nigeria women's national team and would "be sacked" from their club sides.
However, Olajire is adamant that is not the case.
"We have already circulated Onyedinma's speech at the NWFL's annual general assembly, clearly she never said anything of the nature that has been alleged," he said.
"The NWFL chairperson never made such sensitive comments and the NFF are not under any Fifa probe or query."
While contravening Fifa's anti-discrimination policies, the situation is made more complicated because homosexuality is illegal in Nigeria.
Currently, a Same-Sex Marriage (Prohibition) Bill that specifically outlaws same-sex unions is awaiting a signature from president Goodluck Jonathan to become law.
If that occurs, gatherings of homosexuals or any other support for gay clubs, organisations, unions - whether in secret or in public - will be banned, with same-sex couples facing up to 14 years in prison.
However, Olajire insists the football authorities will not be dragged into the homosexuality bill.
"We can only comment on issues concerning football in the land and nothing outside that," he said.
"The NFF operates on its own statues and that of Fifa, anything outside that is outside of our jurisdiction."
On the eve of the 2011 Women's World Cup in Germany, Eucharia Uche, then-Super Falcons coach admitted to purging the Nigerian team of all its lesbian players and argued that homosexuality is "spiritually and morally wrong".
Uche also commented that "the lesbians on our team were really a big problem."
Her reported comments drew a storm of protest from Gay Rights campaigners, and a number of groups wrote to Fifa president Sepp Blatter about the alleged ban.
But when pressed further in Germany, the former international performed a dramatic U-turn by denying quotes attributed to her.
The Super Falcons have won the Africa Women's Championship eight times, but exited the 2011 Women's World Cup at the group stage and did not qualify for London 2012.
In the interview tape, released on YouTube on Friday, Dilichukwu Onyedinma, head of the NPWL, asked about the 'secret' practice of lesbianism in Nigerian football, said: "Exactly, you said it, this is happening in secret. We have people that we're asking to look into clubs.
"You know that this thing has to do with particular clubs. There are particular clubs that frown at it. They don't even want to hear it. Once they hear it, the players are sacked. So it is a practice that is very bad, even in our bible it is condemned. You know of Sodom and Gomorrah. In the bible Sodom and Gomorrah was destroyed because of this kind of act. So we don't tolerate it."
Asked for confirmation that lesbianism is not tolerated in Nigerian football she says: "Yeah, we don't tolerate lesbianism and we always discuss it whenever we meet. We always warn clubs and club chairmen, to please tell their players to desist from it, because any player that we pick for national competitions, and we hear a little story that is involved in that, we disqualify the player."
Asked what happens if she is notified that lesbianism is happening at a particular club she says: "We have to call the attention of the chairman, we can't go and start controlling people's clubs. Everybody is controlling his or her club. When we hear it, because we don't condone it, we have to call the attention of the people who are running that club, to make sure that they warn the people or do something to people to stop it, because we don't tolerate it in our League."
Activists had already reacted with fury to media reports that Dilichukwu Onyedinma had pledged to ban lesbians from football. On Wednesday, a coalition of French activists, football personalities, academics and politicians including World Cup winner, Lilian Thuram, wrote a letter to the Nigerian ambassador to France decrying the move of Dilichukwu Onyedinma which they say comes "in a context where the whole of the Nigerian LGBT (lesbian, gay, bi-sexual and transgender) community is suffering violence and of daily discrimination, whilst the UN Human Rights Council adopted in June 2011 a historic resolution promoting the equality of individuals regardless of their sexual orientation."
The French group says that "Our struggle for the dignity of Nigerian players and all lesbians in the country is not limited to this letter. We will officially ask to the Federation Internationale de Football Association (FIFA) to suspend the participation of Nigeria of all international sporting events."
You may listen to the recording below: