The British talent show judge reportedly told Idol host Ryan Seacrest he was getting engaged to his assistant Terri Seymour two weeks ago, knowing the Los Angeles DJ would reveal all on the live show.
But Seacrest realised the announcement he made was a ruse just after the show ended, and has since been trying to play down the fake revelation.
He says, "The deal is that they're very much in love and I think it could happen soon."
And Cowell, who grinned when Seacrest revealed all, has since denied the engagement.
A show insider says, "Everyone on the show believes the only reason Simon started this whole charade was to dispel all the gay rumours."