A statement by a Colombian minister that bounty hunters were paid to help capture a rebel leader from Venezuela threatens to escalate a bilateral row.
Phone records had suggested Mr Granda was snatched in Caracas
Tensions have been high since Rodrigo Granda was captured in December, with Venezuela insisting he was illegally kidnapped in its capital, Caracas.
For weeks, Colombian Defence Minister Jorge Alberto Uribe denied the claims.
But he has now said Colombia paid for information which resulted in the Farc rebel being captured in Colombia.
Unidentified informants told Colombian police in December that Mr Granda was in Venezuela, and offered to hand him over or give information resulting in his capture.
But the defence minister said no Colombian agents were involved in seizing him in Caracas.
Mr Granda is described as the unofficial foreign minister for the Farc, or Revolutionary Armed Forces of Colombia - the country's main leftist rebel group.
Mr Uribe had repeatedly insisted that Mr Granda was captured in the Colombian border town of Cucuta on 14 December.
But his position was thrown into doubt after Venezuelan President Hugo Chavez said mobile phone records showed he was snatched from a city street on 13 December and smuggled across into Colombia the next day.
Mr Chavez accused the Colombian authorities of lying and announced he was investigating reports that members of Venezuela's own security forces may have colluded in the kidnapping.
Mr Uribe acknowledged on local radio on Wednesday that Mr Granda had, after all, been taken in Venezuela.
However, he continued to reject claims that Colombia had violated Venezuela's sovereignty, saying no Colombian agents had been involved.
"We received information in Bogota from people, whom we won't identify, offering to bring him to us or provide us with information leading to his arrest," The Associated Press news agency quotes him as saying.
"Reward money was paid in this case."
He refused to confirm reports that $1.5m (£800,000) was handed over to the bounty hunters.
The BBC's Jeremy McDermott in Colombia says it appears the Colombian authorities have, at the very least, been economical with the truth.
He says the affair has poisoned already strained relations between the two countries.
The fact that four Colombian police officers were arrested near where Mr Granda was known to operate in Venezuela on 9 December has added to Mr Chavez's suspicions, our correspondent adds.
Mr Chavez has warned of serious consequences should it be proven that Colombian security forces organised the kidnapping.