The rule, named after the London borough council that introduced it in 2003, requires any new building to reduce its carbon emissions by 10 per cent by using on-site renewable energy sources, and has been adopted by more than 150 local authorities.
However, an article published in Monday's Guardian claimed the government department was planning to axe the rule.
But a DCLG spokesman told the AJ: 'There is absolutely no truth to the report from Monday's Guardian, and we are unable to comment any further.'
The news has come as a blow to the British Property Federation (BPF), which has always called for the rule to be abolished.
Speaking after a meeting with the DCLG, BPF chief executive Liz Peace said: 'We would like to reiterate that the property industry is committed to achieving green targets, but that investing in inefficient onsite renewables is simply not always the best way to do this.'
'Before looking at where the buildings get energy from, it is essential to reduce, in the first instance, how much they use,' she added.