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The 56-year-old former England and Liverpool star — who made over 300 appearances for Newcastle in two spells at the club — has been accused of bullying by 22-year-old midfielder Yasin Ben El-Mhanni, backed by several team-mates.
It later emerged accusations had also been made by other players against Beardsley, who has been in his present position since 2009.
Beardsley, who in a highly successful time as a player at Liverpool won two league titles and the FA Cup, issued a statement through his lawyers denying the claims.
“Peter Beardsley is aware of inaccurate media reports which result from unauthorised leaks,” read his statement.
“Allegations of unfair treatment have been made, which are currently being investigated.
“Peter Beardsley categorically denies the allegations. It is hoped the investigation will conclude quickly.
“Peter Beardsley will not be making any further comment at the present time and until investigations conclude.”
The club had earlier issued a statement of its own announcing Beardsley’s leave of absence which came about as a result of his talks with managing director Lee Charnley and head of safeguarding Steve Swinyard on Monday.
The complainants are due to give their evidence later this week.
“After discussions with Peter Beardsley this morning it has been agreed that he will take a period of leave, to commence immediately, whilst the club conducts its investigation into allegations made against him,” read a Newcastle club statement.
“It would be inappropriate for the club to comment further until the conclusion of this investigation.”
It is not the first time Beardsley — a member of the England side that reached the 1986 World Cup quarter-finals and 1990 semi-finals — has been subject to an inquiry over bullying accusations.
In 2003, he and Newcastle Academy director Kenny Wharton were cleared of bullying allegations made by youth players James Beaumont and Ross Gardner by a Premier League inquiry.
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