The 27-year-old, who has scored 26 goals in all competitions this season, was the subject of interest from Blackpool during the January transfer window and is wanted by several clubs.
Norwich, who moved into the second automatic promotion spot behind Championship leaders QPR with a 3-1 home win over Bristol City on Monday night, are the latest club to try to sign Mackail-Smith. However, Peterborough are in no mood to let the forward leave.
"I have had talks with Norwich City but I have also had discussions with our chairman Darragh MacAnthony and our manager Darren Ferguson and we have rejected the proposal," Posh director of football Barry Fry told the club's official website.
"There is always a lot of speculation about Craig because he is the leading goalscorer in League One and has an impressive goal-to-game ratio, but Norwich are the sixth different club to make a bid and we have rejected them all after talking it over with the chairman.
"Craig Mackail-Smith will be in our squad for tonight's (Tuesday`s) game with Sheffield Wednesday, which is a vital game."
Source: PA
Source: PA