Charles Clarke took more than three weeks to tell Tony Blair that serious criminals were among the foreign prisoners released, it has emerged.
Mr Blair has said he has 'confidence' in Charles Clarke.
The Home Office said Mr Blair was briefed when officials were in a position to give him full details.
Lib Dem leader Sir Menzies Campbell said the revelation "sealed the fate" of Mr Clarke, who should now resign.
In total 1,023 foreign prisoners were freed without being considered for deportation after serving jail terms.
According to a Home Office spokeswoman, on 30 March the department was not in a position to give full details to the prime minister, but "when we were, he was briefed".
Mr Blair was told about it four days before the situation was made public.
'Strength of character'
Mr Clarke, MP for Norwich South, admitted in an interview with his local newspaper he would only keep his job if he could maintain support of his colleagues.
He told the Eastern Daily Press: "My own political future depends on my own strength of character dealing with the points that are raised.
1,023 freed without being considered for deportation
79 of them originally jailed for more serious crimes, including 13 of them for murder, manslaughter, rape or child sex offences
Five of them known to have committed offences since release - including violent disorder, drug crimes and grievous and actual bodily harm
Deportation action now started for 63 of the 79 more serious criminals
Officials have decided nine of the offenders should not be deported
"Secondly on the support of my own political colleagues, and thirdly and most importantly, on the decisions of the prime minister."
"If I lost that support, that would be different. I hope I will continue as home secretary."
Mr Clarke also said the pressure he was under "doesn't remotely compare" to the pressure of dealing with the 7 July London bombings.
Sir Menzies told the BBC that Mr Clarke "could no longer command public confidence", adding "the consequence of that is inevitable, he ought to resign".
The revelation comes as Conservative Leader David Cameron, on the local election campaign trail in Oxfordshire, prepares to attack an "irreversible loss of authority" at the heart of the government.
Mr Cameron will say the prisoner blunder is symbolic of a "deep malfunction" in government.
The Tories have unveiled plans to recruit business chiefs to help devise a way to avoid the Whitehall "chaos and incompetence" they blame for blunders such as the mistaken release of the prisoners.
Downing Street also moved to deny a report in The Sun newspaper that Mr Clarke had not offered his resignation to the prime minister as he claimed.
The newspaper said a "close confidante" of Mr Blair had revealed that the first he knew of the offer was when he heard the home secretary mention it on the radio.
Last week Mr Clarke said five immigrants released from prison re-offended and had been convicted for offences relating to drugs, violent disorder and inflicting bodily harm.
Two have also faced rape claims, with one case dropped because of lack of evidence.
The Home Office has not revealed how many of the released prisoners have been tracked down so far by the 200 officers involved in the hunt.
Over the weekend police launched a series of raids on addresses throughout the UK.