Speaking during Prime Minister's Questions, Mr Blair said: "My view of democracy is he is entirely able to present whatever reports he likes and we are perfectly entitled to say that those reports are provided for under the instruction and guidance of the Serbian authorities."

Mr Blair then insisted his government had not "defamed" Mr Simpson by criticising his coverage of the conflict in the Balkans.

His comments come after government officials were reported to be unhappy with the way they felt Mr Simpson had accepted Serb-originated reports on how Nato's air strikes seemed to be having the effect of uniting Yugoslavs behind President Milosevic.

John Simpson: Criticism "goes with the turf"

Mr Blair also told MPs that in his view Mr Simpson "can say whatever he likes and we are entitled to make whatever comments we like".

Mr Simpson is one of the few journalists from a Nato country still reporting from the Yugoslav capital, Belgrade.

The BBC says Mr Simpson's film packages are monitored by the Serbian authorities but his "straight voice reports on radio and TV are not, and that is made clear".

The government's criticisms of Mr Simpson's reporting emerged in The Times newspaper last week.

The paper reported that officials had accused Mr Simpson of "swallowing Serb propaganda".

In a statement issued last Friday, the BBC said "the facts don't bear out these allegations".

The Serbian authorities have recently expelled Mr Simpson's cameraman, which was a move, the BBC said, that "hardly ... supports the allegations being made about his reports".

Responding to the criticisms last week Mr Simpson said: "It just goes with the turf."

Speaking after Mr Blair a Downing Street spokesman said he recognised reporters like Mr Simpson "are doing an extremely difficult job working in very difficult conditions, and clearly enjoy very little freedom".

He added: "I'm not saying that John Simpson is a part of the Serb media machine but the level of access journalists enjoy over in Serbia is very, very limited and clearly they are unable to report in a way they would want."