The Mail on Sunday story quoted anonymous comments from some of Nectar's 16 sponsors to the effect that the programme was unexciting and not driving sales, despite the huge marketing investment.
The story went on to say that Sainsbury had announced a review of Nectar, "which accounts for half [of Sainsbury's] 拢40m marketing budget", and that the retailer's chief executive Justin King refused to rule out leaving the scheme.
LMUK has released a statement, which it said "poured cold tea on the story" and said it was fully aware of the Sainsbury's review and was taking part in the process. It said the MoS article was a "weak story".
Rob Gierkink, LMUK CEO, said: "Sainsbury's initiated a strategic review of its business following Justin King's assumption of the CEO role earlier this year. Nectar was part of this review, as was every other important aspect of Sainsbury's business.
"We worked closely with Sainsbury's and its advisers in recent months and we are confident that this review's conclusions, which were contained in Sainsbury's report on October 19, reflect Sainsbury's recognition that Nectar is very popular with its customers and is an important asset to Sainsbury's."
He went on to repeat King's remarks, made during a press conference, that Sainsbury's customers "value Nectar hugely" and that Nectar "is a fantastic operation with over 13m cardholders".
Gierkink added: "Last month, we had more UK households earning Nectar points than we've had in any month in the programme's history."
The statement did not pass any judgment on what the Mail on Sunday's anonymous sources had to say, but it did say that more new partners were on their way.
According to today's Financial, Times these partners are likely to be from the healthcare and leisure industries. LMUK said it would not comment before any deals were signed with prospective partners.
There are currently 16 partners, after joined the scheme in September.
Barclaycard, one of the four launch partners of Nectar, along with Sainsbury's, BP and Debenhams, stopped offering Nectar to its new cardholders in July.
A Barclaycard spokesman said that this was because it preferred to put the resources it had into offering new cardholders 0% interest on balance transfers until August 2005. When asked if there were plans to reinstate the Nectar offer, he said that Barclaycard could not comment on what would or would not happen in the long term.
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