Whyte says that he still has a claim to the club's assets and that he was behind the consortium, headed by Green, which took over the club, with Green merely acting as a front man.
Green then transferred the assets - which were bought for £5.5m in June last year - to a different company called Sevco Scotland, which then became The Rangers Football Club.
But Whyte is apparently arguing that such a transfer is illegal and has threatened legal action against Green and former Rangers director Imran Ahmad.
Rangers manager Ally McCoist has called for Green to answer the claims and the chief executive duly released a statement on Friday night saying Whyte was fed the information he wanted to hear in order to secure the deal.
Green said: "Once again Craig Whyte has made serious allegations against the people who have committed themselves to rebuilding a Scottish institution which, almost single-handedly, he dragged towards the brink of oblivion.
"These are distorted and malicious allegations coming from a man who is completely discredited and now under police investigation.
"It must be stressed that, no matter what Mr Whyte believes, there was never any possibility of him being involved with us in the ownership of this club and there was most certainly never any intention to pay him anything.
He could not be more wrong
"He claims I was his front man. He could not be more wrong. With 8%, I am the major shareholder in Rangers FC and I have no tie-in of any kind with Mr Whyte.
"He was never going to become an associate and never will. He has no right to any claim on Rangers FC, its shares or assets.
"It is alleged there is a letter which agrees Mr Whyte and a business partner of his, Aidan Earley, would have a majority shareholding in Sevco 5088. If there is, it was not signed or endorsed by me. Perhaps Mr Whyte would be good enough to send me a copy.
"Yes, Mr Whyte was told what he wanted to hear, but there was never any likelihood of him becoming involved again.
"If he wants to go to court we would be delighted to see him there. It is a shame Mr Whyte keeps trying to destabilise the club he very nearly destroyed."
McCoist had said earlier: "Without doubt, the real people I feel sorry for are the supporters.
"Just when they seem to be getting a bit of clarity, something else comes out of left field. I would be very hopeful that our supporters can get the answers they deserve."