Jimmy Wales founded Wikipedia Photo: Gus Freedman
Former Novell chief scientist Jeffrey Merkey says he donated $5,000 to the Wikimedia Foundation in exchange for changes to his Wikipedia entry.
Mr Merkey says Mr Wales agreed to "use his influence" to remove libellous remarks in the entry.
In response, Mr Wales has called the allegations "nonsense".
The edit history of the page does show changes made by Jimmy Wales and that the page was "protected", so that no further edits can be made by the public.
Jay Walsh, a spokesman for Wikipedia, told the Daily Telegraph that the allegation was "absolutely false" .
"Jimmy never made this offer, and of course this is a practice the Wikipedia Foundation would never condone," he told the newspaper.
Writing on a Wikimedia mailing list Mr Merkey reprinted a statement he said he had released to the Association Press news agency.
It said: "Wales agreed that in exchange for a substantial donation and other financial support of the Wikimedia Foundation projects, Wales would use his influence to make Merkey's article adhere to Wikipedia's stated policies with regard to internet libel "as a courtesy" and place Merkey under his "special protection" as an editor."
Mr Wales responded on the mailing list: "Of course I would never offer, nor accept any offer, whereby a donation would buy someone special editorial treatment in the encyclopaedia."
He said he had routinely helped people whose Wikipedia entry contained false or damaging information, adding: "Donations have no bearing on that at all."
Mr Wales added: "I encourage anyone who is tempted to believe this story to consider the source."
The Wikimedia Foundation describes itself as a "non-profit charitable organization dedicated to encouraging the growth, development and distribution of free, multilingual content."
The foundation operates Wikipedia, one of the most popular websites in the world.