Venables, one of two boys who abducted the two-year-old from a shopping centre in Bootle, Merseyside, in February 1993, was jailed for two years last July after pleading guilty to downloading and distributing indecent images of children.
The Parole Board has been considering the case for his release, but James's mother, Denise Fergus, wrote on Twitter: "Good news all just heard venables is NOT getting released xxx".
The Parole Board had to decide whether Venables still posed a risk to the public and will have considered his progress in jail.
Venables and Robert Thompson were ten when they abducted the toddler and walked him several miles to a railway line, where they tortured and killed him. They were convicted of murder and served eight years in prison before being freed and issued with secret new identities. Venables was released on licence in 2001.