A spokesman for the Inter-Services Public Relations denied The Telegraph's allegation that the ISI was running a defamation campaign through the Bangladeshi tabloid Blitz against Khar and Bilawal, the chairman of the ruling Pakistan People's Party.
"These allegations are absurd and baseless. The ISI has nothing to do with this defamation campaign and neither any problem exists between the Foreign Minister and the agency," the spokesman said in a statement.
The defamation campaign was the "handiwork of those who want to weaken the state by creating misunderstanding between various institutions", the spokesman said.
"It is not something new because such people have been fabricating misleading and impish stories in the past as well," he added.
The Telegraph, the spokesman said, "needs to behave more responsibly and confirm veracity of information from respective entities before printing such malicious stories".
He described media reports involving Pakistani military agencies as "rubbish and part of a propaganda campaign". He further said the military reserves the right to "take legal action on such anonymous reports without quoting any names and sources".
The Bangladeshi tabloid's claim that 34-year-old Khar and 24-year-old Bilawal were involved in a relationship had triggered speculation about the fate of the Foreign Minister's marriage with industrialist Feroz Gulzar.
Both Khar and Gulzar have dismissed the tabloid's report as "reprehensible" and "trash". However, The Telegraph had quoted unnamed "senior PPP figures" as saying that they believed the claims about Khar were part of a plot by the ISI to damage her reputation because it blamed her "for her part in facilitating a UN investigation into thousands of missing people detained by the security forces".
One unnamed PPP official said the ISI expects the UN Working Group on Enforced and Involuntary Disappearances, which recently visited Pakistan, to recommend senior army and intelligence officials be charged for their role.
The military could blame Khar for allowing the delegation into the country, the official said. "They are not happy with her...The UN mission received a cold reception but Hina was called in by the President to meet him and the army chief. She crossed some red line," the official further said.