Ford made the comments Tuesday at a previously scheduled ceremony to honour Canadian boxing great George Chuvalo.
In its Tuesday edition, the Star reported that Ford was asked to leave the Garrison Ball — an annual dinner held at Toronto's Liberty Grand hotel attended by senior armed forces personnel including Defence Minister Peter MacKay — because organizers were concerned he was impaired.
Some sources who attended the event told the Star that Ford spoke in a rambling, incoherent manner.
After handing the keys of the city to Chuvalo on Tuesday, Ford was asked about the contents of the Star story.
"It's an outright lie. It's the Toronto Star going after me again and again and again," said Ford. "They're relentless. I'll go head-to-head with the Toronto Star anytime.
"Let's just wait till the election and we'll see what happens. It's just lies after lies after lies."
Ford was also angry that reporters had used the event to ask questions about the allegations.
"It's about George Chuvalo today," he told reporters. "Have some respect."
Chuvalo said he couldn't comment on the report in the newspaper because he hadn’t seen it. But he defended the mayor's character.
"Rob's always been a good person, he's always been a kind person," said Chuvalo, who has known the Ford family for many years.
- Timeline: Toronto Mayor Rob Ford
Gala committee denies asking mayor to leave
The Star's investigative story, which relied heavily on anonymous sources, reported Ford was asked to leave the cocktail and dinner event. Coun. Paul Ainslie confirmed to the newspaper that Ford was asked to leave.
“I urged the mayor’s chief of staff, Mark Towhey, to have the mayor leave the event,” Ainslie told the Star.
The Star story says Ainslie refused to discuss why Ford was asked to leave. The mayor's office has denied that Ford was asked to leave.
As well, the Garrison Ball's volunteer organizing committee said in an email statement to CBC News on Tuesday that they did not ask Ford to leave the Feb. 23 event.
"No member of the event’s organizing committee, including Councillor Paul Ainslie, directed the mayor to leave the event that night," the email said.
However, one event organizer quoted but not named by the Star told the newspaper Ford “seemed either drunk, high or had a medical condition.”
Other sources who attended the ball told the Star that Ford did not appear to be intoxicated at the event.
The story quotes real estate agent Anita Springate-Renaud, who spoke to Ford briefly at the gala. "He wasn't in any way intoxicated," she told the Star.
Springate-Renaud confirmed her remarks to CBC News on Tuesday.
"He seemed perfectly fine," she said.
Coun. Doug Holyday, the city's deputy mayor, said the credibility of the newspaper report was undermined by the fact that the people making the allegations were not identifying themselves.
Pointing to recent court cases that have involved Ford, Holyday said they had "common threads" involving opponents of the mayor.
"There are people that do not like our agenda. There's a strong left-contingent in the City of Toronto and on council that don't want us to continue with the things that we’ve been doing," Holyday said when speaking with reporters on Tuesday morning.
Ford's office has not responded to the CBC's requests for comments in response to the Star story.
Report cites staff concerns
The Star story also reports that some members of the mayor's staff have been concerned about Ford's drinking for some time.
They refer to previous incidents including an impaired driving charge in Florida in 1999 and an argument Ford had with a couple at a Maple Leafs game in 2006.
When asked whether councillors have expressed worry about the mayor's drinking, Coun. Sarah Doucette said Tuesday that "people have been concerned, yes."
She said that she hasn't witnessed the mayor drinking, but urged Ford to seek help if he needed it.
"I just want to send a message to the mayor that if he does have a problem, please get help," she said. "He's got to be healthy to run our city. We need him here 100 per cent as a mayor, and I just want to see him get well."
Several members of council said Tuesday that they had not seen the mayor drink in their presence.
"No, I never have, I've never seen him take a drink," Holyday said when asked whether he had seen the mayor impaired at an event before.
Coun. Michael Thompson, who said he had not read the Star story, said he, too, had not seen the mayor consume alcohol.
"I actually have never actually seen him having a drink," Thompson said.
Earlier this month, Sarah Thomson, who ran against Ford in the 2010 mayoralty race before dropping out, alleged that Ford touched her inappropriately and made a suggestive comment to her at a Canadian Jewish Political Affairs Committee meeting.
Thomson alleged that Ford groped her buttocks while the pair posed for pictures. She also wrote on a Facebook post that the mayor was "out of it” at the event.
Ford denied Thomson’s allegations.
Coun. Doug Ford appeared on a private radio station on Tuesday morning and denied his brother has a drinking problem. Doug Ford's office has not responded to the CBC's request for an interview.