The rumours surfaced after Diaz was pictured with Cruise and fellow actors Penelope Cruz and Javier Bardem as she celebrated her 40th birthday on August 30.

Earlier, Cruise’s representative had slammed the reports and now Diaz denies it.

“I happened to bump into Penelope Cruz, Javier, Tom and his son in a hotel and joined them for dinner. At midnight I said, ‘I’m 40’. So we took pictures and then said ‘Goodnight, see you later, blah, blah, blah’ and I haven’t seen him since.”

“But the next thing I know, apparently I am dating him and it’s full on and he is coming after me,” she added.

The actress made the clarification on a chat show.

Diaz was in a relationship with baseball player Alex Rodriguez for an year but parted ways in September 2011.