Tomorrow's issue of the newspaper carries a full report under the front page headline: Slumdog Star For Sale.
Negotiations, which took place without Rubina's mother's knowledge, were conducted by the child's father and two uncles.
The News of the World rejected the offer and alerted Save the Children.
In a bid to escape India's real-life slums, father Rafiq Qureshi put the angel-faced darling of the Oscars up for adoption, demanding a price of 20 million rupees - £200,000.
Offering the deal to the News of the World's undercover fake sheik this week, Rafiq declared: "I have to consider what's best for me, my family and Rubina's future.
"We live in one room, seven of us sleep on the floor. I earn between 300 Rupees (£2) and Rs500 (£3) a day, but since all this film thing I haven't even worked. We have got nothing out of this film, they have given us nothing," he said.
The News of the World was tipped off about Rubina's family's sickening intentions by a concerned inhabitant of the squalid slums in the heart of Mumbai at the beginning of March.
Rubina won the hearts of film lovers around the world as the real life girl from the slums of Mumbai playing the young Latika in the film which picked up eight Oscars and a pile of glittering awards.
The British film made by director Danny Boyle tells the rags to riches story of a young man from the slums who wins the Indian version of Who Wants To Be A Millionaire.
Set and filmed in the squalid alleyways of Mumbai, the film depicts true-to-life scenes of poverty and child cruelty, where young orphans are routinely blinded and crippled by local thugs and forced to beg on the streets.
With a staggering 11million children abandoned in India every year, there is no shortage of desperate orphans to exploit, reports the News of the World.
News Of The World
