Mr Gyurcsany said he had lied about the state of the economy
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Hungary's prime minister has apologised for the foul language he used in a leaked speech, which triggered mass protests and calls for his resignation.
Ferenc Gyurcsany did not however address the central accusation of knowingly misleading the public about the economy to win April's elections.
Instead the Socialist leader vowed to implement further measures to cut the country's huge budget deficit.
Protesters are holding an 11th day of rallies outside the parliament.
Mr Gyurcsany addressed the criticism of his speech at the beginning of Wednesday's Cabinet session in Budapest, saying he was sorry if the language he had used had caused offence.
"Of course I am sorry... these were the words of reproof, affection and passion," he said.
He acknowledged the damage the leaked speech - made to Socialist deputies in May - had done to his own standing and that regaining credibility would take time.
Economic measures
He told the Cabinet session "we thought the courage to do things was more important than the necessity of speaking of it".
Protests in the capital, Budapest, have entered their second week
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"I did not believe that voters would understand that kind of straight talk. In a sense I did not believe in myself either, that I would be able to tell all this," Mr Gyurcsany said.
Since winning the election in April, the government has introduced hefty tax rises and subsidy cuts in an attempt to rein in the biggest deficit in the European Union.
As a result of the measures, government popularity has fallen to 25% from about 40% in April, and it faces a key test in Sunday's local elections.
The BBC's Nick Thorpe in Budapest says the conservative opposition hope a poor showing by the Socialists will strengthen their case that the government should resign.
The government hopes that Tuesday's acceptance by the European Commission of an economic programme designed to cut Hungary's budget deficit will help to persuade voters the country is still on the right track, our correspondent says.
Protesters say they will turn the event into a cultural gathering over the weekend to avoid a ban on political rallies ahead of Sunday's local elections, he adds.