Paul Newman is "doing nicely" amid reports that he's being treated for terminal lung cancer.

"All we have is one comment from Mr Newman's office, and that is that Mr Newman says he's doing nicely," revealed Daniel Burstein a spokesperson for the notoriously private actor.

The 83-year-old star of films like 'Butch Cassidy and the Sundance Kid' has over the past few months been surrounded by speculation that he is dying, sparked by recent photographs and his withdrawal from professional commitments.

But in the most revealing comment yet, Newman's business partner and longtime neighbour confirmed on Wednesday that the actor was suffering from cancer.

"It's a form of cancer and he's dealing with it," A.E. Hotchner told Associated Press and revealed that Newman had first revealed his condition some 18 months ago.

Last month, citing health reasons, Newman dropped plans to direct a theatre production 'Of Mice and Men' in his hometown of Connecticut. He also failed to attend the Indianapolis 500 motor race, despite being a co-owner of the frontrunning Newman-Haas team.

A photo posted by Martha Stewart on her blog on 6 June only added to the speculation — it showed the actor looking gaunt at a lunch to benefit his organisation for critically ill children.

Unconfirmed reports have claimed that the 'Cool Hand Luke' star is receiving cancer treatment at New York's Memorial Sloan-Kettering Cancer Centre.

Hotchner, who in the 1980s established the Newman's Own salad dressing company with Newman, said the actor was operated on "somewhere in the area of the lung" a few years ago.

"He's battling," added Hotchner. "He's doing all the right stuff. Paul is a fighter. He seems to be going through a good period right now."

In terms of prognosis, Hotchner claimed: "Everybody is hopeful. That's all we know."

But Hotchner later altered his comments on Newman — despite confirming the cancer story to Reuters, he told 'Access Hollywood' that he knew nothing of Newman receiving treatment for an illness.

Newman, who won an Oscar for 'The Color of Money' in 1986 lives with his wife, actress Joanne Woodward, in Westport.