"He can't have said that," Sanader told the press in parliament.
The contentious poster, featuring disabled war veterans from the Bosnian Serb entity, accompanied an international conference on mine-clearance in Zagreb.
The parliamentary club of Croatian Democratic Union (HDZ) deputies said the statements Racan made earlier today were inappropriate attacks on the editorial policy and "a sort of pressure on the media".
They dismissed Racan's claim that he had postponed today's session of the national committee monitoring European Union accession negotiations, which he chairs, because he could not get a quorum.
"All committee members from the HDZ were in parliament and were ready to take part in the committee's work," the spokesman for the HDZ club of deputies, Gordan Jandrokovic, told the press.
He said Racan had "abused his post of committee chairman to get an opportunity to once again seriously accuse the HDZ".
Jandrokovic added this was a familiar scenario "in which the SDP first inappropriately attacks, and when the HDZ counters, plays the victim". He recalled that Racan had recently labelled HDZ deputies "storm troopers and clientelists".
Jandrokovic conceded that "both sides ignored the rules of fair play," but said the "HDZ defended itself in the same way that it was attacked".