The allegations were made by Australia's Channel Nine television but Pietersen said he would be "stupid" to try to cheat the system while Australia captain Michael Clarke denied any knowledge of sharp practice.
Australia's Channel Nine said the International Cricket Council (ICC) general manager of cricket, Geoff Allardice, would be investigating the matter in Durham, where the fourth Test begins on Friday.
However, the ICC insisted Allardice was coming over solely to speak to the teams regarding their concerns regarding the controversial Decision Review System and said it was not investigating any alleged attempts by players to "cheat" Hot Spot.
"These media reports are totally incorrect," said ICC chief executive David Richardson in a statement issued by the global governing body on Wednesday.
"Geoff Allardice is meeting with both teams and umpires to see how we can best use the DRS and the available technology going forward in the next two Test matches. It has nothing to do with any players," the former South Africa wicketkeeper added.
Nine suggested both sides were under suspicion of trying to "fool" Hot Spot, which uses thermal cameras to see if a batsman has hit the ball, either with his bat or pad.
The channel added there was concerns regarding Pietersen's dismissal in the second innings of the third Test at Old Trafford, when a noise was heard indicating a nick but no Hot Spot was detected on the bat.
Pietersen described the report as "horrible journalism" and "hurtful lies".
"I am never afraid of getting out! If I nick it, I'll walk. To suggest I cheat by covering my bat with silicon infuriates me," he tweeted.
"How stupid would I be to try & hide a nick when it could save me on an LBW appeal, like in 1st innings where hotspot showed I nicked it," he added.
Clarke told the Sydney Morning Herald he had no knowledge of tape being used to fox the technology, which is often used to review dismissals.
"If that's the case, then we're talking about cheating and I can guarantee there is not one person in the Australian change room that will cheat," Clarke said. "That's not the way we play cricket.
"It's hard for me to talk for other players but I've never heard any conversation about that in the Australian change room...I didn't know there was such a thing you could do to hide nicking the ball on Hot Spot."
It is perfectly legal under the Laws of Cricket for players to tape their favourite bats for "protection and repair".
England fast bowler Graham Onions said the allegations were "outrageous" as he, too, denied suggestions that players were trying to con DRS.
"It's a huge accusation and it's outrageous really," Onions told reporters at Chester-le-Street in northeast England.
"Tape has been used to mend cracks or to get our favourite bats to last as long as possible but it sounds completely silly to even think that people are putting things on their bat to try and help them to cover up decisions.
"We play the game as fair as you can, as I'm sure the Australians do as well," Onions insisted.
Meanwhile Australia all-rounder Steven Smith said tape was used solely by his side for the purpose of protecting the bat.
"Obviously I don't think any of us have done anything with silicone on our bats. We know that we put fibreglass tape on the front and that's purely for protection of the bat, to try and make them last longer."
"We haven't even discussed anything about that, trying to cheat the system at all."
Controversy has raged over the effectiveness of the DRS during the five-match series, in which England retained the Ashes after winning the first two games and drawing the third.
Earlier, Cricket Australia said it
had no immediate comment on the Nine report and that they were awaiting
"clarification" from the ICC.
Australia celebrate after Peter Siddle claimed the wicket of Kevin Pietersen during Day 5 of the third Ashes Test at Old Trafford (Gallo Images)