Lennon revealed the Edinburgh club had agreed terms with the 32-year-old only for the player and his representatives to attempt to renegotiate the deal.
Earlier this week, Lennon said of McDonald Hibs were “well down the line in talks, but not over the line just yet”.
But McDonald signed a new one-year deal with Motherwell yesterday and said: “There were a couple of serious offers on the table for me, but I always had it in my mind that Motherwell was a club where I love being.
“I spoke to Neil [Lennon] a couple weeks ago, but in terms of being down the line I spoke to their head of recruitment, and that’s as far as it got.”
However, McDonald’s version clearly irked Lennon who said: “I was surprised at the suggestion that Scott turned down an offer from Hibernian. We were interested in taking the player to Easter Road.
“Terms had been agreed, but Scott and his representatives came back to renegotiate and we decided to withdraw the offer. The board and I will not be messed around with in negotiations, and we will now pursue other targets.”