Downing Street has rejected calls for Culture Secretary John Whittingdale to step aside from decisions about press regulation after he disclosed that he had a relationship with a sex worker.
Mr Whittingdale, who is single, said he had been unaware of the woman's occupation and had broken off the relationship after six months in 2014 when he discovered someone was trying to sell the story to the press.
Labour's shadow culture secretary Maria Eagle said it was now essential for Mr Whittingdale to give up his responsibilities for press regulation to ensure there was no perception of "undue influence" in his dealings with newspapers.
But a senior Downing Street spokesman responded: "The Prime Minister has got full confidence in John Whittingdale to carry out all of his duties."
The Number 10 spokesman confirmed that Mr Whittingdale did not inform Mr Cameron about press interest in his relationship at the time he was appointed to the Cabinet after the 2015 general election.
The PM learnt about the affair only around 10 days ago, when the story emerged on the internet, said the spokesman. He said it was a decision for Mr Whittingdale whether he felt it necessary to inform the PM about the issue.
In a statement last night, Mr Whittingdale insisted that events had no bearing on any decisions he took in office.
"This is an old story which was a bit embarrassing at the time. The events occurred long before I took up my present position and it has never had any influence on the decisions I have made as Culture Secretary," he said.
BBC2's Newsnight reported that four newspapers - The People, The Mail on Sunday, The Sun and The Independent - had investigated the claims at the time but concluded it was not a public interest story.
Although the relationship occurred before he was made a minister, it occurred at a time when he was chairman of the influential Commons Culture, Media and Sport Committee which had held a series of high-profile hearings on the phone-hacking scandal.
Ms Eagle said: "Everyone is entitled to a private life. However, these revelations raise serious questions about why the Secretary of State has reneged on the Government's promise to deliver the cross-party agreement on Leveson when this is something he was previously committed to as chair of the Culture, Media and Sport Select Committee," she said.
"In order for the public to have any confidence in the Government's approach to press regulation and to allay any concerns about perceptions of any undue influence, the Secretary of State must now recuse himself from any decision-making over this matter, just as Vince Cable was removed from deciding media policy in the last parliament."
And Brian Cathcart, from the Hacked Off campaign group, said that since becoming Culture Secretary with responsibility for the media, Mr Whittingdale had taken a number of decisions which had been welcomed by the press.
He told the Press Association: "He is compromised. There is absolutely no doubt about it, he is compromised. He knew the press were on to him and he didn't tell the Prime Minister, and we would like to know more about how much he knew.
"He knew that at least one newspaper had this story - was he approached by other newspapers? Did he ever wonder why they didn't run the story?"