He is revered as the last true rock god and his band, Nirvana, created the soundtrack for the alienated grunge generation. So now, nearly two decades after Kurt Cobain's death in April 1994 at the age of 27, is it time for "Kurt: The Musical"?

Certainly not, according to Cobain's combative widow, Courtney Love. Suggestions that a Nirvana musical could be in the works – masterminded by Love's sometime co-manager, Sam Lufti, and going ahead with her blessing – have led the singer-actress to come out swinging. "There will be no musical," she told the Observer. "Sometimes it's best just to leave things alone."

Rumours that Lufti was working on a Broadway musical which would tell the story of Love's life with Cobain have coincided with reports of a new CBS sitcom entitled Smells Like Teen Spirit, and the auctioning of a smashed bass guitar from the original Smells Like Teen Spirit video. Love, and many Nirvana fans, fear the commercialisation of Cobain may be getting out of hand.

The temperamental Love – who had grunge hits with Doll Parts and Celebrity Skin and starred in Milos Forman's The People vs. Larry Flynt – says that while she has been in discussions with the director of The Kid Stays In the Picture, Brett Morgan, over a film looking at her life since Cobain, she is opposed to commerical exploitation of his legacy.

"I said yes once – to Baz Luhrmann to use eight seconds of Smells Like Teen Spirit in Moulin Rouge. But he wasn't allowed to use it in the marketing. I didn't get the part in the film. I was so pissed off I made up the term to 'Baz' somebody."

Love recently gave up some rights to Cobain's likeness and Nirvana's publishing but, contrary to recent reports, the singer says she has not ceded control of rights to their daughter, Frances Bean, saying: "She doesn't have anything to do with it."

Nirvana may now be a distant and glorious rock memory, said Love. But that does not mean the authenticity and rebel spirit of the man and the band are now fair game for profit-making schemes. "Ryan Adams said something profound: 'Every time I play my guitar for money, and every time I play my guitar to get laid, I lose a little of my mojo.'"

Protection of the Cobain legacy explains why Love condemned Disney's use of Smells Like Teen Spirit in a Muppets episode that cast Nirvana as Queen from their Bohemian Rhapsody era.

Love says she considered suing the entertainment giant but was dissuaded by her manager. "What the fuck's with the Muppets? I happen to like Elmo and I think the Cookie Monster is interesting but I know him [Kurt] and I know he didn't want to be a Muppet. It was a disgrace. Like pissing on a grave."

The CBS sitcom Smells Like Teen Spirit has been created by Dave Goetsch, the writer behind The Big Bang Theory and 3rd Rock From the Sun. According to the Hollywood Reporter, the show will follow the foibles of an 18-year-old who drops out of university to launch a multibillion-dollar internet company from his garage with the assistance of his sister and his well-meaning but out-of-touch, grunge-loving parents.

A Nirvana musical would undoubtedly offer rich commercial pickings. Abba are estimated to have madeup to $6bn (£3.75bn) from Mamma Mia! – far more than they made during the lifetime of the group. The genre worked for the LA hair band musical Rock of Ages and it worked for Jersey Boys, about Frankie Valli and the Four Seasons, which has made $2bn worldwide.

But some investors in the Nirvana catalogue have found the music is largely too hard-edged to be useful in a commercial context, although a staged version offers some control.

"It all comes down to how intelligent and cool the work is," says former manager of Smashing Pumpkins Andy Gershon. "It's possible to do a successful grunge musical, but you'd have to find a great story to tell."

According to Love, that story is not going to be the tumultuous, star-crossed relationship between Kurt and Courtney. She says her policy is now to keep as much control as she can. "I got so bullied into selling what I sold. I regret it so much. I'm never selling the rest of it."Love herself has recently branched out into fashion with a label called Never The Bride, selling the distressed baby doll looks of her youth. But she's not about to abandon music. The British label Wichita is about to release a new Courtney Love single. "It's called This is War. It's two minutes, 59 seconds," she says. "It's the best song I've written in my life."