Yorgen Fenech, who has been charged in connection with the assassination of journalist Daphne Caruana Galizia, was reportedly a guest of honour at one of the Prime Minister's party's last February, where he gave Muscat three wine bottles worth thousands of euros as a gift, the Times of Malta reports.
It also reports that Fenech had, on previous occasions, gifted Muscat two watches worth thousands of euros.
The bottles were allegedly Pétrus, a Bordeaux red wine, one of which was a 1974 vintage - the year Muscat was born, and the two others were 2007 vintages - marking the year his two daughters were born.
Muscat has been in the press recently for his refusal to immediately resign over reported links between his office, and people who were allegedly involved in the assassination. Muscat will be resigning only after a new PL Leader is elected in January.
Just recently, the first report of a gift by Fenech to Muscat, a watch worth €20,000, emerged.
The Office of the Prime Minister issued a statement, but did not deny that the gift was received, but did say that there are "pure inventions being circulated."
In that statement, the OPM had said: "The Prime Minister will not engage in answering partial, deeply manipulated information being selectively leaked to parts of the media by someone who is directing the accused in a hideous assassination case to obviously try to build a narrative that is both misleading and self-serving."
"The Prime Minister did his duty in this case despite the fact that he was threatened, as he himself reported, with a smear campaign", his office said before noting that Muscat continues to hold the right to take "appropriate action at the right time" and answer with facts that show "the manipulation and the pure inventions being circulated right now and others being obviously concocted."
"No amount of personal vendetta timed with vehement spite by someone will deviate from these facts", the statement read.
"Meanwhile, it must be noted that the Prime Minister has always followed all the codes and rules related to gifts he received", the statement concluded.
In a statement, the Opposition said that Muscat receiving the gifts was clear evidence of the closeness of Muscat and "the circle of criminals."
The Opposition said that it is unacceptable for the Prime Minister to be so close to people who are accused with the assassination of a journalist, and said that Muscat must leave immediately.