The former X Factor winner hit the headlines over the weekend when it was alleged he was at risk of being dropped by Simon's Syco Label over the track.
But James has now responded via Twitter, telling fans the song should be viewed in the same way as Eminem's hit track 'Stan', about an unhinged fan who bombards Eminem with letters about his deepest, darkest thoughts.
James wrote: "The song 'Follow The Leader' from the mixtape is not promoting terrorism, it's a story, a reciting of a Stan Esc letter from a demented fan… Just for the record."
He later added: "As far as I know, I am still with Syco, but I am exclusively signed to Sony. People look too deeply into the media circus, it's about music."
James then clarified to one follower: "Syco are a label within a record company I.e Sony.. There are many labels that offer different things within Sony."
Singer-songwriter James won the ninth series of X Factor in 2012 and went on to have a worldwide smash with winner's single 'Impossible', a cover version of the Shontelle song.
His debut album hit number two in the charts and spawned the singles 'You're Nobody 'Til Somebody Loves You' and 'Recovery'.
But amid his professional success he has faced controversy, most notably when he was forced to apologise after a song surfaced that featured him rapping homophobic lyrics. He briefly quit Twitter amid the furore and cancelled a string of public appearances after being diagnosed with exhaustion by his doctors.
Simon Cowell or Syco have yet to comment on the latest rumours.
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Watch James' 'Impossible' music video below: