Slumdog Millionaire's young stars at the Oscars on Sunday: front left, Azharuddin Mohammed Ismail, Rubina Ali and Ayush Mahesh Khedekar; back left, Ashutosh Lobo Gajiwala, Tanvi Ganesh Lonkar and Tanay Hemant. Ismail and Ali, who live in a Mumbai slum, have been promised better housing in India. (Canadian Press)

Slumdog Millionaire director Danny Boyle has refuted claims by the parents of the Indian child actors he used in his movie that the children were poorly paid.

Boyle, in an impromptu news conference on Sunday at his hometown of Radcliffe, England, said reports the two child actors — who come from a Mumbai slum — were not paid enough were "untrue."

He said the families of Rubina Ali, 9, and Azharuddin Mohammed Ismail, 10, were paid "very well" but all that money had disappeared.

The Maharashtra Housing and Area Development Authority in their district has promised better housing for the families of both children.

The pair recently returned to a hero's welcome in Mumbai after Fox Searchlight paid their way to attend the Oscars on Feb. 22.

Education fund with incentives set up

Boyle said he and the film's producers decided to set up a special fund that would reward the two children once they finished their education. He would not divulge the amount of the funds.

"They will receive a substantial sum of money individually when they complete their education," said the 52-year-old director whose film captured eight Oscars, including best movie and directing.

Boyle said an educational plan laid out for the children with incentives seemed the best way to improve their lives.

The director took his trophies — including his BAFTA and Golden Globe awards — to the St Mary's Social Club in the northwestern English town, where his father used to be the manager.

Boyle said he drank lemonade at the club when he was a child.

"[My dad] used to get up and sing, 'Oh Danny Boyle', which was pretty embarrassing when you're 11 years old," recalled Boyle.