Screenwriter Joe Eszterhas claimed the film - which he wrote - would not be made because the 56-year-old star "hated Jews" and called them "oven dodgers", but Mel has responded saying it was simply a sub-standard script which led to the project being shelved.
In a letter released to Deadline.com, he wrote: "Joe, not only was the script delivered later than you promised, both Warner Brothers and I were extraordinarily disappointed with the draft. In 25 years of script development I have never seen a more substandard first draft or a more significant waste of time. The decision not to proceed with you was based on the quality of your script, not on any other factor.
"Contrary to your assertion that I was only developing Maccabees to burnish my tarnished reputation, I have been working on this project for over 10 years and it was publicly announced 8 years ago. (sic)"
The project tells the tale of Judah Maccabee, a Jewish man who led a revolt against the Seleucid Empire.
In a nine page letter to the 'Beaver' star, Joe claimed he was only involved to rid himself of the years of anti-Semitic claims that have dogged him.
He wrote: "I've come to the conclusion that you never had, or have, any intention of making a film about the Maccabees.
"I believe you announced the project with great fanfare - 'a Jewish Braveheart' - in an attempt to deflect continuing charges of anti-Semitism which have dogged you.
"I've come to the conclusion that the reason you won't make 'The Maccabees' is the ugliest possible one. You hate Jews."
He also claims Mel referred to Jewish people as "oven dodgers" and denied the holocaust.