The daily Berliner Zeitung had reported that the foreign intelligence service had acted in an advisory capacity for the training program conducted by about 30 police specialists between 2005 and 2007.
The newspaper said the training was agreed on in October 2004 when then-Chancellor Gerhard Schröder met Libyan leader Muammar Qaddafi in the North African nation.
"The BND has neither offered training assistance nor was connected in an advisory capacity," a BND spokesman in Berlin told the DPA news agency on Saturday.
Despite the denial, several German parliamentarians on Saturday demanded the convening of the parliamentary control committee, which concerns itself with the activities of the secret services. Green Party leader Claudia Roth spoke of an "incredible need for explanation."
A spokesman for the federal government pledged a thorough investigation of the matter. At the time of the training, the head of the office of the chancellor, Frank-Walter Steinmeier, was in charge of oversight of the secret services. Steinmeier is today Germany's foreign minister.
According to reports, former members of Germany's GSG-9, the country's elite anti-terror unit, founded a private security company that paid police and others on a freelance basis to do training for up €15,000 per trip. The policemen allegedly conducted the training without the knowledge of their superiors while on holiday or after taking unpaid leave.
The BND spokesman said the agency knew nothing of the engagement of a private security firm.