"It's absolute nonsense," Souness told the Lancashire Evening Telegraph.
"A year ago David's agent was trying to tout him around various clubs and I got a call from Gordon Milne, Newcastle's director of football, to say that they weren't interested in David and as far as I know that is still the case.
"My information is that a midfielder is not their priority at the moment.
"It wouldn't surprise me if there was interest in Lucas Neill because he's done very well for us.
"So I wouldn't blame anyone for fancying a move for him but he's one that I wouldn't want to let go."