A CBI spokesperson said Interpol India had received information from Interpol London to this effect in which Scotland Yard had denied reports suggesting Sheikh's detention at Heathrow airport.
Mumbai police commissioner Hasan Gafoor had on Tuesday said Rahil Sheikh was held in London on the basis of a notice issued by Interpol.
"We have been asked to furnish evidence regarding his involvement in the July 11 blasts, which we have already sent across," he had said.
The CBI spokesperson said acting on this information, the agency approached its counterpart in London which responded promptly by denying any knowledge of the detention.
Interpol has issued a red corner notice against Rahil Abdul Rahman Sheikh, identified as the principal organiser behind the July 11, 2006, serial bombings in Mumbai that left 185 dead and hundreds injured.
Rahil, along with Zulfikar Fayyaz Qazi and Zabiuddin Ansari, is suspected to be a key conspirator behind the serial blasts and had set up escape plans weeks before the bombings.
The police named Rahil and others as key figures in Pakistan-based militant outfit Lashkar-e-Tayiba's cells operating out of Gujarat, Maharashtra and Delhi.
A resident of Grant Road area in south Mumbai, Rahil handled communication between these cells and LeT's Pakistan-based commander for operations targeting India.
Another key figure is Azam Cheema, the man who had authorised and overseen the serial bombings and also responsible for funneling Lashkar recruits, raised mainly from the ranks of the Students Islamic Movement of India, to training camps in Pakistan.
The Gujarat police identified 30-year-old Rahil, along with Qazi, as the key conspirator of the attempted bombing of an Ahmedabad-Mumbai train on February 19 last year.
In March last year, Rahil's name surfaced again after the Delhi police shot dead top LeT operative Mohammad Iqbal, a Pakistani national.