The wife of Prime Minister Tony Blair conceded today that she made mistakes by becoming involved in business dealings with an Australian con man but insisted she had not abused her position or done anything illegal.

Choking back tears at one point, Cherie Blair said she erred by allowing someone she barely knew to become involved in her family's affairs and by brushing off questions from the media in an attempt to protect her family's privacy.

"I am sorry if I have embarrassed anyone, but the people who know me well know that I would never want to harm anyone, least of all Tony or the children or the Labor government, or misuse my position in any way," said Cherie Blair, 48, a prominent civil rights lawyer.

Earlier today, the prime minister's office accused the media of "character assassination" and insisted there was no evidence of wrongdoing in Cherie Blair's dealings with Peter Foster, a convicted con man.

The controversy began with newspaper stories about Foster helping the prime minister's wife buy two apartments in Bristol for $790,000.

The deal was legal, but Cherie Blair and her husband's office created a political crisis by initially denying Foster's involvement.

Allegations that immigration officials tried to hasten Foster's deportation from Britain and that the prime minister's wife called Foster's attorneys to discuss his case kept the story on front pages. Cherie Blair has denied those allegations.

Foster has served jail terms in Britain, the United States and Australia, mostly on charges related to a series of diet pill scams. He has been ordered deported from Britain.

Cherie Blair said she did not know the "full story" about Foster until a couple of weeks ago, and that she met him only once, "for less than five minutes."