Deputy Prime Minister John Prescott has hit back after allegations were made by his former lover in an interview with a Sunday newspaper.
Mr Prescott said much of Tracy Temple's recollections in the Mail on Sunday were "simply untrue" and "motivated by a desire to maximise financial gain".
Ms Temple, his diary secretary, said she felt she was used as a "scapegoat".
Mr Prescott admitted he had "acted stupidly" and appealed for privacy as he tried to rebuild his marriage.
Fighting for his political life and showing no signs he intended to resign from the government, Mr Prescott issued a statement in which he admitted he had had "intimate relations" with Ms Temple.
But he said "much of her recollections in the Mail on Sunday are simply untrue and are clearly motivated by a desire to maximise financial gain".
"It is totally unacceptable for the Mail on Sunday and other newspapers to trawl through a long list of people - some hardly known to me - ex-staff members, family and friends, offering large amounts of money to make allegations without substance," he said.
Sir Alastair Graham, Chairman of the Committee on Standards in Public Life, said Mr Prescott may have broken the ministerial code.
"There are some question marks in relation to these allegations that have been made or the detail that's come out and possible breaches of the ministerial code."
But he added it was up to Tony Blair to decide what Mr Prescott's political future is.
"The issue that the prime minister has to consider is to whether the public duties as a minister of the deputy prime minister got unreasonably mixed up with his private life," he told BBC News.
He added that the ministerial code said ministers of the crown were expected "to behave to the highest standards of constitutional and personal conduct".
Transport Secretary Alistair Darling said it had been a "pretty bad" week for the government, with Home Secretary Charles Clarke fighting off calls to resign over revelations over the release of foreign prisoners and after Health Secretary Patricia Hewitt was booed by nurses at a conference.
"Each one of these things on their own is bad, the bringing of together all three together is very bad for the government.
Ms Temple, pictured with Mr Prescott in 2001, said she felt she had been made a scapegoat
"None of these things are helpful," he told Andrew Marr on BBC One's Sunday AM.
"It's not the first time politicians have had affairs of this sort... but we as a government have to concentrate on those things that we were put into power to sort out."
Mr Prescott said he intended to take the matter to the Press Complaints Commission.
"I admit that I have acted stupidly and caused great distress to my wife and family. Pauline and I would now like to request the media to give us the privacy space and time to allow us to try to re build our marriage," he said.
Ms Temple was speaking in an interview with the Mail on Sunday newspaper for which she was paid in excess of £100,000.
Mr Prescott, MP for Hull East, has said he regretted the affair and it had left his wife Pauline "devastated".
'Lucky not to be caught'
Ms Temple told the newspaper she felt she had been abandoned by him when news of the affair came out and had received just one phone call from her ex-lover.
"I feel I have been used and am being used as a scapegoat. They have abandoned me and hung me out to dry," she said.
She told the newspaper she had regular sexual encounters with Mr Prescott in his office with the door open while other civil servants worked outside.
They also had sexual encounters in the Mr Prescott's tax-payer funded flat in Admiralty Arch and in the Admiralty Boardroom, she said.
The pair were "lucky" to not have been caught, she added.
In a video statement released on Saturday night, a tearful Ms Temple said:
"I've had to live with the lies and the misinformation that was actually written about me, causing damage to my reputation and possibly my future career.
"Therefore, as a result, I felt I needed to tell my side of the story and let people know the truth."
One of Mr Prescott's friends, Sports Minister Richard Caborn, told BBC News the deputy prime minister was "very depressed" over his "huge mistake" and that wife Pauline was "greatly saddened".
Prime Minister Tony Blair has refused to discuss the affair saying it was "a private matter".
But former Deputy Prime Minister Lord Heseltine told Sunday Live on Sky News: "It is legitimate to say that a private affair is private, but we are not talking about the affair, we are talking about the behaviour of the Deputy Prime Minister.
"You simply cannot have a senior member of a government bringing that government into ridicule and contempt by the way in which that person behaves. That is what has happened."
Shadow home secretary David Davis said it was likely Mr Prescott felt he had lost face and wanted to resign.
"In his own words, he's made himself a laughing stock. And I think, actually, he probably wants to go himself now," Mr Davis told Sky News.