The Guardian says Queiroz has been declared a persona non grata at Sporting, which are angry after he went public with United's interest in the 21-year-old defensive midfielder.
Sporting declared in a statement: "We are the major Portuguese sporting strength and Carlos Queiroz is now persona non grata at Sporting. People have the right to express themselves but he did [it] too much and attacked the chairman Filipe Soares Franco.
"The club do not want to waste time on this person. [However] this decision will not affect the good relations between Sporting and Manchester United."
It is a remarkable development considering that Queiroz coached the club in the mid-1990s and the good relationship between United and Sporting which has developed in recent years as Cristiano Ronaldo and Nani have left the Portuguese club for Old Trafford.
Queiroz replied to the statement by outlining his view of what has happened in recent weeks.
"The Sporting president accused me of trying to approach a player [Miguel Veloso] illegally and having a low moral and ethical code," he said. "These are grave accusations but, nevertheless, despite the personal slurs, this is something to be resolved between the clubs.
"His declarations must be clarified and investigated as it's the first time that a president of another club visits Manchester and publicly accuses a member of the club hierarchy of trying to illegally approach a player. I'm deeply disappointed as this is a position that's based on unjust conclusions taken from facts that are seen as different by both sides.
"I'm sad about all this as when I observe players it doesn't mean that it's to snatch them away, although, as all clubs, we do have the right to keep tabs on prospective signings."