A large police search was reportedly started after a private investigator claimed missing British girl Madeleine McCann had been spotted in Paraguay.
Maddie, who would now be aged 12, is said to have been spotted "in the custody of a woman" in the city of Areguá, around 20 miles from the capital of Asunción
British researcher Miraz Ullah Ali spoke exclusively to a newspaper in the country, revealing that he had information of Maddie's wherabouts gleaned through an investigation.
Ali told newspaper ABC Color: "My team and I received the information that Madeleine arrived in Paraguay a month or two ago and is living in Areguá in the custody of a woman."
Media outlets reported a multi-agency search had begun in the city.
A spokesman for Britain's Metropolitan Police told The Huffington Post UK the force was aware of the article and making enquiries.
A representative of the McCann family said: “Kate and Gerry have been made aware of this sighting."
But now the claims have been debunked by authorities in the South American country.
International crime agency Interpol expressed anger that Ali had not informed them of his findings, saying “it should have been communicated to us”.
Sebastian Jara, from the agency's Paraguay office, said: “We do not have anything I can add, except that we have begun to move with all our might, but for now we have nothing. Areguá is a very large and very populated city and this research caught us by surprise.”
The main commissioner in Areguá, Miguel Orué, said they learned of the case through the media.
Meanwhile Paraguayans were quick to pour cold water on the development, suggesting local police were motivated only by the huge reward for Maddie's rescue.
Rodolfo Arzamendia wrote: "All Areguá National Police is looking for the 2,000,000 ... sorry, little girl."
There had previously been an offer of as much as £2.5m for information on Maddie's whereabouts.
Maddie's parents Kate and Gerry, of Rothley, Leicestershire, are continuing the search for their daughter, despite the length of time that's passed.