The news story was picked up by other media outlets across India.
Eyewitness Parikshit Murria told CNN that he saw "a horde of men" molesting girls "in every possible manner."
Meanwhile, the allegations were firmly denied by a police chief in Bangalore, who suggested that they were concocted by journalists.
"The media is making it look like molestation was happening by blurring the faces
[of people in pictures] but no such thing was happening," said Praveen Sood, Bangalore's commissioner of police.
However, Sood admitted there were chaotic scenes in the central business district during the end-of-year celebrations, and "panic in the crowd."
According to the Bangalore Mirror, "a mob" of "unruly men" engaged in a "brazen mass molestation of women" as tens of thousands of revelers gathered on December 31.
"All hell broke loose close to midnight as hooligans in the garb of revelers started pawing, molesting and passing lewd remarks on women on the streets, forcing some of them to literally take off their stilettos and run for help," it reported.
On Wednesday, The Bangalore Mirror said it stood by its story. "We have spoken to two victims who were molested and nine people who were witnesses and confirmed what they saw," editor Ravi Joshi told CNN.
"I don't know what the police mean [when they say no one was molested]. We don't know why they're not believing the reports," he said.
Bangalore-based software engineer Parikshit Murria told CNN he was horrified by the scene unfolding before him around 11.30 p.m. while he was out with two friends.
Murria said they saw a "horde of people walking very fast." They assumed there might be a "VIP or celeb" in the group he said, but soon realized there were two girls at the center of the mob.
The men were "trying to molest them in every possible manner," Murria said.
"We just got few glimpses of those girls and one of them was on ground. I don't know what happened to them after that, we were pushed further away by the crowd. We never expected this kind of atmosphere and we were completely shocked."
Murria claimed that minutes later, he and his friends saw a man trying to touch one of a group of four women who were "without any male accompany." Murria said they scared the man off and accompanied the group to a taxi.
"I was in the front and two of my friends on the back, and those girls were in between," Murria told CNN. "I don't even remember how many hands and people I threw away."
Some men became aggressive with him and his friends. "A few came to fight with us and few just went away after looking into my eyes. Finally, we dropped them near their cab."
Murria reported seeing numerous girls in tears, some being guarded by the police. "At some places there were shoes and slippers all over the road, like some stampede has just happened."
'One of them groped me'
Chaitali Wasnik, a 24-year-old photographer, told CNN that she was groped at a street party in the Indira Nagar area of Bangalore at around 1.30 am on New Year's Day. This is a different location to the other reports, described by Wasnik as "a pub hub and a posh part of Bangalore."
"The area was brightly lit and there were thousands of people there partying on the same street. I had a friend with me, but he was a little drunk so I was trying to get a cab for him. Then two men approached me from the front. I moved aside. But one of them groped me," she said.
"I was wearing a jumpsuit, he slid his hand inside and groped my breast. I panicked, and when I came to my senses, I started to hit and scratch him. He too panicked and started telling people surrounding us that he didn't do anything. People around me pulled me back, saying 'leave it, it happens.' That guy and his friend escaped."
Wasnik added: "The guy appeared to be 25-26 years old. There were lots of policemen in the area but no one available around me when the incident happened. I cannot complain to the police because the guy ran away. I assumed they won't be able to do anything because I have no identification. I couldn't do anything so I just searched for a cab and went home."
'They try to copy westerners'
G Parameshwara, home minister of Karnakata state, confirmed that assaults happened -- despite what the police told CNN. However, he seemed to place blame on the alleged victims.
"They try to copy the westerners, not only in their mindset but even in the dressing," he said in an interview with local press
. "So some disturbance, some girls are harassed, these kinds of things do happen."
Responding to the minister's comments, Himel Sakar, a representative for the Delhi-based women's rights NGO, Breakthrough
, told CNN: "There's a simmering sentiment among a lot of people that because women were out there celebrating New Year they were asking to be assaulted.
"It's now that we must lead the charge for a reoccupation of our public spaces."
Parameshwara told local media that additional police and surveillance had been deployed to control and monitor the crowds, and they had footage of assaults taking place.
"We will see who has done all these kinds of things and we'll see what best we can do," he said.
But this was contradicted by senior police officers who spoke to CNN. Praveen Sood, Bangalore's commissioner of police said: "This [mass molestation] did not occur. Not a single lady was molested. We have the complete unedited video footage [from CCTV cameras] and are going to release it."
He alleged that pictures with blurred faces made it look like molestation was happening when it was not.
Sood added: "There were tens of thousands of people gathered at MG Road and Brigade Road on New Year's Eve. This happens every year, has been happening for the last 25 years. There were 1,500 police personnel present to manage the crowd."
However, he admitted that people tried to break barricades amid chaotic scenes and panic in the crowd.
Meanwhile K.V. Sharath Chandra, an additional commissioner of police in Bangalore, told CNN: "We are waiting for a victim to come forward and file a complaint with the police... but no one has come to police yet. If someone registered a case, that would be fantastic."
Sexual assault frequently goes unreported in India because victims feel they will not be taken seriously or kept safe.