Sheikh Nabawi Muhammad al-Ish, a cleric at the revered Al-Azhar mosque in Cairo, said the Governing Council "has no legitimacy" and that "Arab and Muslim states should not deal with it". His comments were published by Egyptian opposition newspaper al-Wafd on Wednesday.
But the office of Sayyid Muhammad Tantawi, the grand sheikh of Al-Azhar, said al-Ish's opinion did not carry the weight of a religious edict, or fatwa, contrary to the newspaper's claims.
"There is no such fatwa" on the Governing Coucil, said an official at Tantawi's office, adding that al-Ish was not entitled to issue religious edicts.
Fatwas from al-Azhar reflect the views of the clerics who issue them and are not binding on Muslims. But many Sunni Muslims use such religious edicts as a moral guide.
Cleric faces questions
"The Governing Council in Iraq is devoid of religious and secular legitimacy because it is established in opposition to the principle of consultation," al-Ish had declared.
But Tantawi told Reuters the cleric would be called to account for issuing an unauthorised ruling.
Tantawi also received the US ambassador to Egypt, David Welch in Cairo on Wednesday.
During the meeting, the religious leader called on Washington and London "to take action so that the Iraqi people could take charge of its own destiny," reported the official MENA news agency.
The Iraqi Governing Council has failed to win outright Arab backing, although foreign ministers at an Arab League meeting earlier this month called it a step in the right direction towards an elected government.