Police say Lynley and Michael Le Grand's detention in prison has been postponed on compassionate grounds. (ABC News: Ambrose Boli Berani)
In short:
Indonesian police say Michael and Lynley Le Grand are still under police detention despite a media report claiming they were out on bail.
Police say the couple's detention in prison has been postponed while Mr Le Grand receives treatment in hospital for cancer.
The couple are facing up to 12 years behind bars if convicted of prostitution.
An Australian couple held in a Bali jail since October have had their detention "postponed" according to police, amid anger over a report in a News Corp outlet claiming they had been released on bail.
Michael Le Grand, 50, and Lynley Le Grand, 44, had been in custody while police built a case against them for allegedly violating Indonesian laws banning prostitution.
Investigators last year also alleged one employee caught in a raid on the couple's massage spa business was underage, prompting potential charges under the country's child-protection laws.
Australian couple arrested in Bali facing 12 years' prison
Photo shows Lynley Le Grand in a pink shirt sitting down.
The couple are facing up to 12 years behind bars if convicted over prostitution.
Last week they were due to have their case formally handed over to prosecutors in a step towards a court hearing, but a police spokesman said that was postponed due to Mr Le Grand's ill health.
Now, the police say the couple's detention has been postponed while Mr Le Grand receives treatment for cancer at Bali's Trijata police hospital.
Ms Le Grand has been permitted to accompany him. However, the spokesman stressed the couple had not been released on bail, as reported by The Courier Mail newspaper.
Their lawyer, Joniono Raharjo, told the ABC the report incorrectly claimed the couple paid a sizeable sum of money for bail, and he said they intended to take legal action over The Courier Mail report.
The Bali police spokesman also denied the report of a payment.
Bali police told the ABC the decision to postpone the couple's detention in prison had been made on compassionate grounds.
Michael (left) and Lynley Le Grand are ushered out of a police media event in Bali in October. (ABC News: Ambrose Boli Berani)
The Pink Palace spa was described on its Instagram account as a "blissful sanctuary of relaxation", but it stopped operating after it was raided in October.
The couple own other businesses in Bali including the GOAT Seminyak sports bar and a popular cafe.
The couple's three children returned to Australia after the arrests.
The raid in October was part of a broader crackdown on alleged prostitution providers that also targeted a separate spa majority-owned by the estranged wife of former AFL player Ricky Olarenshaw.
Sarnanitha, known as Nitha, failed in November in a court bid to be released from prison, after alleging that she was only the frontwoman for the business.
She argued it was secretly co-owned by four Australian men, including her estranged husband.
Mr Olarenshaw in November told Nine News on the Gold Coast that much of what had been reported about the case was "false and inaccurate", describing it as a "complicated and delicate situation".
Sarnanitha is facing at least 12 years in prison if convicted.
