According to IGN Square Enix character designer Tetsuya Nomura has issued the strongest denial of a Final Fantasy VII remake yet. In an interview with Japanese gaming magazine Dorimaga, he said, "It appears that there are often overseas rumors like 'Are you currently developing a VII remake?' My apologies, but we're absolutely not making [such a game]."
Okay? It's not being worked on. Nomura did give the fanboys some good news though, as he went on to say that it will almost definitely be remade at some point, since it's something that even a lot of his coworkers want and Square Enix isn't ignorant of what the fans want. As he said, "As long as there are people who want to make it and people who are waiting for it, we don't want to proclaim 'the end.'"