Wallabies coach Robbie Deans has accused the Lions of creating a "sideshow" after it was discovered that a wedding-planner had been filiming one of their training sessions.
Counterpart Warren Gatland denied there is paranoia among the tourists over them being watched in training.
Gatland revealed his fitness staff had ejected a spectator from a training session while in Perth for last week's opening Australian tour match against Western Force.
The British and Irish Lions coach said the man, who was using a video camera, was "chased down" by two of the team's staffers and forced to delete footage after filming a closed training session.
The Lions admitted to The Telegraph that the suspected spy was actually a local wedding-planner who happened to be filming there.
"If Australia try to video us I've got no worries about that so there's no allegations of spying.
"They are perfectly entitled to do that," he told reporters.
"I said we threw some punter out of training that was videoing us, that was all. I don't get paranoid about people watching trainings and videoing."
But Deans dismissed the Lions' claims in the opening salvo of mind games between the two teams on the tour.
"They create their own stories," the Wallaby coach told reporters.
"It's just a sideshow really.
"What the motivation is, you would have to ask Warren. I don't want to fuel the fire. We don't have a security officer, the Lions do. Maybe that's an indication."
A Wallabies spokesman added: "We flatly deny that anyone connected to the Wallabies has been involved in filming or watching the Lions at training."
Deans was dismissive when asked about Gatland's spying claims on Sunday ahead of the June 22 opening Test in Brisbane.
"No, we don't need to. It's obviously something high on their minds. They are creating their own stories," he said.
Asked if the system of rival teams having training sessions closed to the media and the public only enhances an opposition's temptation to spy, Deans said: "To a large extent you presume that people are watching. But obviously you don't open the gates."
Australian media revealed Monday that on the last Lions tour here 12 years ago the Wallabies extracted extra intelligence on the tourists by secretly accruing data on the visitors' lineout calls.
The 2001 Wallabies coach Rod Macqueen said he used Scott Johnson, now Scotland's director of rugby, to compile the calls which he admitted helped Australia win the key moment in the deciding third Test when lock Justin Harrison stole a pivotal lineout in the final minutes to ensure a series victory.