The Sun says the Italian is trapped in a bitter legal battle after his sacking by Inter Milan.
Inter want to avoid paying him up to £36million in compensation.
So they made a thinly-veiled reference to a drugs probe published in the Italian press involving a person known to Mancini and some of his staff.
There was never any suggestion Mancini or anyone at Inter did anything wrong and at the time the club dismissed the reports.
Yet on Thursday they cited them among the reasons for Mancini's removal.
Last night a furious Mancini said he would sue Inter.
He said: "Their decision originates from events that seriously offended my honour and reputation.
"The illegal broadcast was denounced in the competent courts and I've told my lawyer to protect my image in all legitimate arenas and to stigmatize the actions of my employer that has attempted to abuse those false and illicit events."
Mancini will now be worried Chelsea might be put off hiring him after learning of the controversy.
His agent Giorgio de Giorgis said: "Chelsea are one of the world's five most important clubs and there is a possibility Roberto will be their manager."