Mr Balls is a close ally of Gordon Brown
Cabinet minister Ed Balls has suggested that Gordon Brown did not want the Lockerbie bomber to be released.
Speaking to BBC Radio 4's Today programme, the schools secretary said: "None of us wanted to see the release of [Abdelbaset Ali] al-Megrahi."
But he said it was a matter for the Scottish government, not Westminster.
The prime minister has declined to say whether he supported the decision, which the Scottish SNP government says was made on compassionate grounds.
But Mr Balls, a close ally of the prime minister, said: "I have to say that none of us wanted to see the release of al-Megrahi but that wasn't a judgement made by the British government it was a decision made by the Scottish executive."
Asked about the comment later, the prime minister's spokesman said: "The prime minister set out the position last week and I do not think I am going to go any further than that ... The most important part is that this was a decision for the Scottish executive government."
The SNP urged clarification. Angus Robertson MP said: "The prime minister must make a clear statement setting out exactly where his government actually stands. Ed Balls' comments contradict previous statements by the Foreign Secretary, and add to the confusion that has engulfed Downing Street."
And for the Conservatives, William Hague said: "This is a classic example of the right hand having no idea what the left hand is doing.
"We have yet to hear two government ministers agree on a single aspect of the decision to release Mr al-Megrahi."
Megrahi, the only person convicted in connection with the 1988 Lockerbie bombing, was found guilty of 270 counts of murder in 2001. He was given a life sentence.
But the Scottish government, which decides on criminal justice matters in Scotland, agreed to release him early last month because he is terminally ill.
The decision has been heavily criticised in the United States, where 180 victims were from, but the prime minister has not commented on whether he thinks it was the right thing to do - stating only that it was a matter for the Scottish government and that he "respected" their decision.
However he faced accusations of double dealing and suggestions the release was linked to British oil interests in Libya after it emerged Libyan officials had been told the prime minister did not want to see Megrahi die in a British prison.
On Monday Liberal Democrat MP Alistair Carmichael called for an inquiry into the "handling and consequences" of the Megrahi case by the Scottish Affairs committee.
Mr Carmichael, MP for Orkney and Shetland, wrote to the committee's Labour chairman Mohammad Sarwar the case struck "at the very interface of government relations between London and Edinburgh".
The MP, who is also on the committee, added: "It is our job to ensure a good working relationship between the governments and it is therefore right we conduct an early inquiry."