Tony Blair has said he has "every confidence" in David Blunkett and defended his right to a private life.
The home secretary is seen as close to Mr Blair
The prime minister's remarks came as Stephen Quinn, the husband of Mr Blunkett's ex-lover Kimberly, said he would fight for his family.
It is claimed Mr Blunkett used his position to help Mrs Quinn's nanny's visa application.
Ex-Treasury civil servant Sir Alan Budd has now been named as the head of the independent review of the allegations.
Mr Blunkett is said to have checked the application was filled in correctly but not intervened to get it approved.
At his monthly media conference, Mr Blair said: "He has been, is, and will continue to be, a first class home secretary."
The prime minister was asked how there was a difference between Mr Blunkett's behaviour and the "sleaze" which formed the basis of much of Labour's onslaught on the last Conservative government.
The prime minister replied: "I have actually always said that politicians are entitled to their
"The issue in my view is to do with the performance of his public duty... I could give you a long list of the things he has done over the past few years
which have been to the benefit of this country."
Vogue publisher Mr Quinn also intervened in the row on Monday, telling reporters: "I love my wife, I love my family, I'd do anything to look after them."
The investigation will focus on the visa application for permanent residency by Leoncia Casalme, who left Mrs Quinn's employment two months ago.
Sir Alan Budd was appointed by the Home Office's permanent secretary to head an independent review into the case.
Sir Alan was chief economic adviser to the Treasury from 1991 to 1997 and is currently provost of the Queen's College, Oxford.
Conservative leader Michael Howard said: "I hope they clear him, I bear him no ill will."
His shadow home secretary, David Davis, said he would have preferred a judge to investigate the claims and complained the inquiry would cover only the visa claim, not wider misuse questions.
"All of this could have been resolved quickly but there will now be many
unanswered questions hanging over home secretary's head," said Mr Davis.
A series of senior ministers figures, including Chancellor Gordon Brown and Alan Milburn, have backed Mr Blunkett.
The Liberal Democrats have accepted his denial of wrongdoing but say the inquiry will help address public concern.
In a statement on Sunday, Mr Blunkett said: "Trust, plain speaking and straight talking is something which matters so much to me as a politician and as a man that I have decided, of my own volition, to request an independent review of the allegations that I misused my position.
"I regret the time and resources needed to undertake this, but in the light of the flagrant attempt to link my public position with the deeply personal circumstances of my private life, I believe that on this specific occasion, it
is right to lay this accusation to rest."
Mr Blunkett and Mrs Quinn, right, with Michael Parkinson and his wife Mary
As well as the visa claims, The Sunday Telegraph said Mr Blunkett, 57, shared confidential security information with Mrs Quinn, publisher of the Spectator magazine.
This included telling her parents to avoid Newark Airport near New York hours before a security scare.
Other claims include that Mr Blunkett gave Mrs Quinn, 43, a first-class train ticket which had been assigned to him.
It is also alleged that Mr Blunkett took her to Spain accompanied by bodyguards at taxpayers' expense.
Another claim is that he ordered his government chauffeur to drive Mrs Quinn between London and his Derbyshire home.
Mr Blunkett's spokesman said information about the New York security scare was already in the public domain.
'Acrimony and venom'
The home secretary confirmed giving Mrs Quinn the train ticket, saying he believed he was entitled to claim for a partner's travel, but offered to refund the money if necessary.
Mr Blunkett said his bodyguards were already in Spain as part of his normal protection.
And he said Mrs Quinn had only been given lifts on trips his chauffeur was already scheduled to make on government business.
He also dismissed as "nonsense" claims that he had asked for a policeman to be posted outside Mrs Quinn's central London home during a May Day riot.