Dennis Wise was reported to be irate after contacting Palace to take on-loan Derry back to Elland Road to cover for injuries, only for the player to seemingly refuse the offer.
However, this was not Derry's decision according to Warnock, who claims it was him who blocked the midfielder's return.
"Dennis asked me on New Year's Eve for permission to let Shaun go back to Leeds before January 19, but I refused because I have to look after the interests of my own club," Warnock said in the Yorkshire Post. "The loan deal runs until January 19 and I have told Shaun 'I am sorry, but I cannot let you go back before then'. We need him here.
"Shaun knows he is a Leeds United player, but the decision was not his to make. It was mine as the manager of Crystal Palace."