In an interview with French sports dailyL'Equipe, Mourinho revealed he was desperately close to accepting an offer from the FA before Capello was appointed in the wake of Steve McClaren's dismissal.
The Italian responded angrily to the Real Madrid coach's claim that he was 'hours' from taking his post, declaring it disrespectful to 'other managers' to discuss their jobs.
Plenty to ponder: Mourinho revealed he came close to accepting the England manager's job in 2007
The FA were distinctly unimpressed too, with officials stressing privately that, while they did speak to Mourinho, Capello was always their first choice.
In an official statement,an FA spokesman said: 'Fabio was our first choice for England manager,' a spokesman said. 'We have made that clear from the outset.'
But the Portuguese former Chelsea boss hit back, with his representative countering the FA's claims.
'The statement from the FA is not true,' Mourinho's spokesperson told the Daily Star.
'He was offered the job before Capello. There was a meeting between the FA and Jose and his agent Jorge Mendes in London. There was a lot of talk between the FA and Mendes.
'Jose made a dossier for the FA about what changes England needed to make and he came up with a project for the World Cup. When the offer was made, Jose was in Portugal.'
Italian's job: Capello was disappointed with Mourinho's comments about the England job
Capello, however, was left distinctly unimpressed at being told of Mourinho's admission, insisting:'I don't speak about the relationship with the other clubs, out of respect for other managers.
'I don't like to speak about my relationship with the clubs, with other people. These are my personal secrets. I'll never tell you about what really happened in my career. I think it's serious.'
The FA tried to recruit the Italian as successor to Sven Goran Eriksson but were blocked by Juventus - in particular Juve deputy director general Roberto Bettega - and only then turned to Luiz Felipe Scolari and McClaren.
They explored the possibility of recruiting Mourinho but always suspected he would choose to remain in club management and they were proved right. At no point, they insist, was he ever the preferred option to the Italian.
When Capello was informed of Mourinho's interview, he insisted at first that he did not care.
In training: Capello puts the England squad through their paces ahead of the Ghana clash
'This is a question for the chairman who chose me, not a question for me,' he said. 'Every time a club or a different national team decides to choose a manager, they decide to speak with a lot of managers. It's normal. It's not different.'
Capello's mood soon changed, however, and would not have been helped by reports in Italy last night linking his trusted assistant, Franco Baldini, with a move back to Roma.
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Explore more:People: Fabio Capello, Luiz Felipe Scolari, Sven Goran Eriksson, Jose Mourinho, Steve McClaren Places: London, Portugal, Italy, United Kingdom Organisations: Football Association