The Xtra Factor presenters have been linked to each other since they began co-hosting the ITV2 show together earlier this year.
"We have a great friendship," Murs told Heat magazine. "We're both flirtatious characters, so I think that it would've always been like that. I want the show to be a success, and me and Caroline have been a talking point."
Admitting that he "of course" fancies Flack, the 'Heart Skips A Beat' singer explained: "Caroline's a very attractive woman. If I said I didn't, all the guys would be thinking, 'What's wrong with you?' But there's a difference between fancying someone and going out with someone."
Discussing his love of skinny jeans, Murs said: "I hate baggy jeans, I hate straight-leg jeans. Whenever I put them on, it just looks weird. I've tried it - trust me. I wear skinny jeans and people want to look at my…"
Murs releases new single 'Dance With You Tonight' on November 20. The full interview appears in the new issue of Heat magazine, out today.
> Olly Murs, Jessie J land X Factor performance slots?
Watch Olly Murs's 'Dance With Me Tonight' video below: