April 29, 2012 10:00 AM

Courtesy PEOPLE

From the moment she stepped into the spotlight, Beyoncé has been the center of her fair share of rumors.

But even PEOPLE’s 2012 Most Beautiful Woman was caught off guard when, while pregnant with her first child, whispers started swirling that she and husband Jay-Z had settled on a surrogate to carry their daughter.

“That was crazy. It wasn’t hurtful, it was just crazy,” the songstress, 30, tells PEOPLE. “[I thought] ‘Where did they come up with this?'”

But perhaps the person most affected by the surrogacy speculation was not the expectant mom herself, but rather her own mother, Tina Knowles.

“I thought it was very unfair and very cruel that someone would think that someone would be that diabolical to keep up a charade like that for nine months,” she says. “As a mother it was painful for me to hear the crazy rumors. And I even had people ask me, which was so ridiculous.”

Alluding to an Australian interview in which it was later suggested that Beyoncé had been sporting a prosthetic bump, Knowles says, “It was a fabric that folded — does fabric not fold? Oh my gosh, so stupid.”

Fortunately, the protective mom adds, her daughter’s global fan following offered plenty of support. “There was so much love and well wishes from all over the world — it made it easier to deal with the stupid rumors.”

But the dust didn’t settle once the couple welcomed their baby girl.

Amidst the joy of welcoming Blue Ivy on Jan. 7, the new parents were said to have upset the hospital with their high list of security demands — a rumor that Beyoncé clarifies is “so crazy” and “ridiculous.”

— Anya Leon with reporting by Alexis Chiu

For more of Beyoncé’s exclusive interview, pick up this week’s special issue of PEOPLE, on newsstands now.

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