The Celebrity Big Brother winner apparently told producers that she feels uncomfortable around the journalist, with insiders blaming the fall-out on a "major personality clash" between the pair.
The situation is said to have caused chaos for production staff, who have to ensure they don't end up on the Loose Women panel together. Carol McGiffin, Lisa Maxwell and Sally Lindsay are among the other regulars.
"To say relations between Denise and Janet are frosty would be an understatement. The reality is they really don't like each other and they probably never will," a source told the Sunday Mirror.
"Janet considers herself to be a feminist intellectual while Denise is a salt-of-the-earth northern lass who really enjoys letting her hair down. They have got absolutely nothing in common and would rather have nothing to do with each other.
"When Denise heard Janet was joining Loose Women last year she was pretty shocked. The production staff realise this show is all about the chemistry of the panel so they respected her wishes.
"But both women are professionals, so if a situation arose where they had to go on for the good of the show, they would swallow their pride and get on with it."
Street-Porter and comedienne Jenny Eclair joined the show last year as part a revamp to boost ratings. Welch has been on Loose Women since 2002.
A spokeswoman for the programme insisted that the mix of panellists is decided by the production team rather than the talent.