Rhodri Morgan said at least on one occasion first class travel was used by a civil servant and he was undertaking an inquiry
Wales' first minister has apologised after it emerged civil servants had taken first class flights despite his denial that this had ever taken place.
Rhodri Morgan had said the Liberal Democrat claim civil servants led "first class" and "jet set" lifestyles was "repugnant" and an "outright lie".
Mr Morgan was defending civil servants who promote Welsh business abroad after details of their spending emerged.
He has now written to Welsh Lib Dem leader Kirsty Williams to apologise.
On Monday, the Liberal Democrats, whose Freedom of Information request uncovered the figures, had accused the staff of International Business Wales (IBW) of enjoying lavish living at taxpayers' expense.
I apologise for having misled you and the wider public
Rhodri Morgan, First Minister
Ms Williams said: "Whilst we're in the middle of a recession it's disgusting to know that public officials are flying first class, staying in the most expensive hotels, eating in the best restaurants - all at the swipe of the Welsh credit card."
In an angry response the following morning, Mr Morgan told reporters: "I do find it repugnant that an allegation has been made that civil servants are using first class travel.
Mr Morgan went on to call the allegation "an outright lie".
But on Wednesday he wrote to Kirsty Williams saying he apologised for misleading her and the wider public.
He wrote: "...I stated on the clear and explicit advice from the relevant senior officials that no officials from IBW had flown first class.
"Today I have learned this is not the case.
"I apologise for having misled you and the wider public.
"I need hardly say how disturbed I am by the latest information now to hand.
"I am instructing the permanent secretary to undertake an immediate and thorough investigation and audit of the IBW's expenditure and audit systems.
"This review will be led from outside the assembly government."
First class
He was speaking after evidence emerged that at least two IBW employees from the New York office took first class internal flights in the United States.
Leaked travel documents show Geraint Jones, head of the New York office, flew first class on Virgin America from New York to Los Angeles and back in February 2009.
An IBW corporate credit card was debited £1,302.99 four days before he departed.
The same card was debited £1,475.92 at the Hyatt Regency Hotel in Los Angeles a couple of days later.
In November 2008, Christopher Williams, IBW's Vice President for ICT took three first class internal flights with Virgin America.
It is understood assembly government officials in Cardiff sought a written guarantee from IBW on Tuesday morning that no first class flights had ever been booked, before Mr Morgan launched his attack on the Liberal Democrats on camera.
'Strong and personal'
Ms Williams had been furious about the first minister's attack on her, which she said was "strong and personal".
Responding to his apology she said: "I appreciate and welcome the first minister's apology to me and clarification that the Welsh Liberal Democrats were correct in their assessment that some staff at International Business Wales were travelling first class.
"The first minister's allegations yesterday stating that we had lied to over-hype the story were strong and personal allegations against me and my party," she said.
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