Bernie Mandic claimed Football Federation Australia head of corporate affairs and communications Kyle Patterson had made Kewell look like a greedy villain by misrepresenting the facts.
FFA knocked back the unusual offer from the Kewell camp to play in the A-League essentially on a performance-based package.
But Mandic asserted that the media was misinformed about the details of the deal that fell through and which could see Kewell seek alternative employment abroad.
Kewell is a free agent after completing his contract with Galatasaray of Turkey in June.
"The media has got it wrong on this one," Mandic told The World Game.
"And this confusion is all thanks to Mr Kyle Patterson for spinning untruths to the media and you can quote me on that.
"Harry has always said that he would only come to Australia on a performance-based deal with no guaranteed earnings.
"Harry is no hypocrite and he again sticks to his word. And this is exactly what he wanted in order to play in the A-League. The money figures being thrown around are pure lies.
"We never approached anybody and when FFA asked us how much would we expect for the use of his image for promotional purposes we said we expected no down payment.
"For the record this is what we have proposed:
"If Harry plays for a team in the A-League he does not get paid for any of his home games.
"He only gets paid an equivalent of 70 per cent of gate takings for away games if his presence generates more people than that particular club's average.
"So if for example Harry is playing for Sydney against Adelaide at Hindmarsh Stadium and the Reds' average home crowd last season was, say, 14,000 and 18,000 turn up to watch him play, he gets 70 per cent of the income generated by the extra 4000 people.
"If the crowd is less than 14,000 he gets nothing. If the crowd is 14,000 he gets nothing either.
"If he is injured and misses 10 matches he does not get paid, unlike some marquee players who cost a fortune and were injured for many matches.
"And if, God forbid, he is injured for the whole season he gets nothing.
"Most importantly the clubs will not miss out on any part of their home gates because the money paid to Kewell will come from the FFA.
"Now you tell me how this is being greedy on our part. Have you heard of any similar deal in the world?"
Earlier this week, FFA restated its support for any A-League club
wishing to secure Kewell's services with Melbourne Victory also
declaring that it had not yet given up on signing the 33-year-old.
'FFA rejects the imputations made in the comments by Bernie Mandic today," an FFA spokesman said.
Mandic said that Kewell was genuinely interested in returning home and his England-based family was also keen to come and live in Australia.
But he said Kewell's chances of playing in the A-League had diminished greatly after the FFA's intervention.
"The FFA refused our offer which is fair enough," he said.
"However this episode proves beyond any doubt that Harry is not about money but about giving something back to the game."