In a recently posted video - https://www.youtube.com/watch?v=HWJUU-g5U_I - Matt Cutts admits negative seo is possible. He says that the Disavow tool is there to battle this but I frankly do not believe the tool does that much.
It's already clarified by Aaron wall of SEO Book that negative seo is possible, Matt Cutts agreement over this is just a strong confirmation.