Abdelbaset Ali Mohmed al Megrahi had been released home to die in Libya from prison in Scotland in August.
His lawyer dismissed the report. "It's absolutely untrue," lawyer Tony Kelly told Reuters when asked if he could confirm a Sky News report that his client had died. "He's definitely not dead."
"I'm not saying anything about his health condition other than the fact he is alive and breathing," Kelly said.
In his only full-length interview since being released from prison, Megrahi told The Herald: "We all want to know the truth. The truth never dies."
Speaking from a hospital bed at his home in Tripoli, Megrahi talked extensively about his 10-year battle with the Scottish legal system and insisted he did not commit the worst terrorist act on mainland Britain.
Megrahi, who had terminal prostate cancer, revealed he dropped his appeal against the conviction because he would not live to see its outcome and was desperate to return to his family.
"It is all about my family, " he said. "People have said there was pressure from the Libyan authorities or Scottish authorities, but it wasn't anything like this."
Instead, he put his faith in an appeal for compassion and said he was impressed by Justice Secretary Kenny MacAskill during their meeting at Greenock Prison.
"I thought he was a very decent man and he gave me a chance to say what I wanted and to express myself. He gave me the chance to make a presentation to him and he was very polite."
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