A search operation is reportedly underway in Paraguay after missing Madeleine McCann was allegedly spotted in the country.

A researcher called Miraz Ullah Ali claimed that he had seen Madeleine, who would now be 12-years-old, in the city of Aregua.

The reported sighting is now being investigated by four police stations, an anti-kidnapping division and Interpol.

Mr Ali told Color ABC: "My team and I received the information that Madeleine arrived in Paraguay a month or two ago and is living in Aregua in the custody of a woman."

Madeleine went missing from a holiday apartment in Praia de Luz in 2007.

Commissioner Sanny Amarilla, deputy chief of one of the police stations hunting for Madeleine, confirmed that a search was underway.

He told The Sun: "We are investigating neighbourhoods where there are foreign citizens, villas, condos, to see if there is someone with a similar description that corresponds to the newspaper clipping.

"This news stretches across the globe, it is very important. So if they are in the area we need to find this girl and return her to her family."

Madeleine's parents, Gerry and Kate McCann, have been made aware of the sighting.

A spokesperson for the family told The Sun: "Kate and Gerry have been made aware of this sighting.

"They would encourage anyone who has any information about Madeleine to get in contact with officers from Operation Grange."

However, Fox News Latino reported that authorities in Paraguay have discounted reports that Mr Ali has found Madeleine.

Jalil Rachid, Paraguay's vice minister of interior security, told Radio Monumental: "The information we have is that no" the missing girl has not been found in Aregua. The would-be investigator "obviously left with empty hands".