Simon hit back on Twitter after hearing the claims and insisted he would "never" stop anyone from One Direction returning to the show that made the boys a household name.
Following X Factor's results show on Sunday night (23 October), Simon tweeted: "Love the show tonight. A long night. Reading some stories. To be clear, I would never 'ban' anyone from One Direction appearing on the show."
Simon's tweet came after rumours surfaced suggesting there is tension between the music mogul and Niall, after Niall signed a solo record deal with Universal Music instead of Simon's label Syco.
Loved the show tonight. A long night. Reading some stories. To be clear I would never 'ban' anyone from One Direction appearing on the show— Simon Cowell (@SimonCowell) October 23, 2016
A source then claimed to The Sun On Sunday: "Simon really thought the 1D boys would show loyalty after he mentored them on the show and made them the huge global success they are. Instead they went behind his back. He's not going to be doing them any favours. He knows artists love performing on the show as there are eight million viewers to promote their songs to.
"Niall also chose to do The Graham Norton Show. The X Factor don't like to have acts that have been elsewhere."
Niall surprised fans at the end of September, by releasing his very first solo track 'This Town'.
At the time, Niall said: "I'm excited to announce I have signed a record deal with Capitol Records USA and released my first solo song. Thank you to all the One Direction fans for your love and support as always. I'm looking forward to the next part of this journey together."
As well as releasing the song (that he co-wrote) to Spotify, iTunes and Apple Music, Niall recorded an accompanying acoustic music video for VEVO, filmed at the historic Capitol Studios in Hollywood.
Following its release, Niall scored a top ten hit, as 'This Town' debuted at number nine in the music charts.
Like Niall, Zayn has embarked on his own solo career and Liam Payne has teased that new music is soon to come from him too. Harry Styles, meanwhile, has turned to acting and will feature in new war movie Dunkirk and Louis Tomlinson has been spending time over in the US with his baby son Freddie.
That doesn't mean, though, that One Direction won't ever be reuniting. Speaking on The Graham Norton Show, Niall admitted he couldn't reveal when the boys will get back together, as he doesn't know himself, but they will eventually.
He said: "For now we are doing our own thing. We can't put a date on it but it won't be in 50 years. It's in the foreseeable future. We've talked about it, but for now we'll just play it by ear and see what happens."
Zayn announced he had left One Direction in March 2015.
Follow us on Twitter @RevealMag for all your celeb, fashion and beauty news!
Fancy winning some GREAT prizes? Check out Reveal Competitions here!