British Defence Secretary Liam Fox's political career hung in the balance on Monday as he prepared to face a parliamentary grilling over his friend's reported involvement in government affairs.

Fox on Sunday responded to accusations that he had an inappropriate working relationship with friend Adam Werritty, saying he was "very sorry" for "giving the impression of wrongdoing".

In a statement he also accepted it was "a mistake to allow distinctions to be blurred between my professional responsibilities and my personal loyalties to a friend".

But the minister said he would answer "all questions" about Werritty's involvement in government business, including Afghanistan and Libya, during the scheduled House of Commons defence questions on Monday.

Fox insisted that "at no stage" did he provide classified information or briefings to Werritty -- who has no official government role -- or assist the businessman in his commercial endeavours.

The under-fire minister also revealed he had apologised to Prime Minister David Cameron for meeting a commercial supplier without the presence of an official, and was working to legislate against such meetings in the future.

Cameron on Saturday said that Fox had his "full confidence" despite the allegations about Werritty, who was best man at Fox's wedding.

But hours later Downing Street said Cameron wanted a preliminary report setting out the facts by Monday and was not prepared to wait until an internal Ministry of Defence (MoD) inquiry reports back in a fortnight.

Fox, who visited Libya on Saturday, ordered the MoD inquiry on Friday into claims that Werritty had privileged access to him despite having no official role or security clearance.

Fox stopped short of apologising for the nature of his relationship with Werritty, and regretted only that he "may have given the impression of wrongdoing" and "given third parties the misleading impression that Werritty was an official adviser".

The Daily Telegraph newspaper reported on Monday that Fox had used public funds to pay Werritty as a parliamentary researcher.

The row escalated on Saturday when The Observer newspaper carried footage on its website of Werritty apparently attending a meeting between Fox and Sri Lankan President Mahinda Rajapakse in London in 2010.

The Telegraph on Monday also claimed that Werritty had acted as Fox's personal envoy to the Asian nation and had organised meetings with senior ministers.

Other newspapers reported that Werritty had brokered a meeting in Dubai in June between Fox and the Porton Group, a company hoping to sell phone call encryption technology to the British military.

Porton chief executive Harvey Boulter discussed with Fox whether British troops in Afghanistan could use the technology to call home without being detected by the Taliban, the Financial Times said.

The Conservative lawmaker argued the Dubai meeting came about by chance while he was on a stopover from Afghanistan.

Boulter called this claim "kind of ridiculous" in comments published in Monday's Guardian newspaper.

"It's a bit like me bumping into you in a pub in London and buying you a beer and saying 'oh by the way can I meet the owner of the paper' and you saying 'oh sure', come on," he said.

The defence chief said Sunday he had "learnt lessons" from the affair and that he would take greater care in the future to protect himself and the government from accusations of wrongdoing.

Labour lawmaker Jim Murphy, the shadow defence minister, said Sunday he had written to Cameron calling for a full investigation, highlighting "several shortcomings" in the current probes.

"The terms of reference are narrow and simply inadequate in light of the evidence that has come to light," he added.

"It is important that the breadth of this inquiry matches the severity of the accusations."

British PM demands answers in defence minister row
London (AFP) Oct 8, 2011 - British Prime Minister David Cameron on Saturday demanded an urgent report into claims his defence minister involved a friend in government business concerning Sri Lanka, Afghanistan and Libya.

Liam Fox denied that national security was compromised by his ties to Adam Werritty, who was best man at his wedding but has no official government role, and Cameron's office at first said Fox had his "full confidence".

But hours later Downing Street changed its tune, saying Cameron wanted a preliminary report on the facts by Monday and was not prepared to wait until an internal Ministry of Defence (MoD) inquiry reports back in a fortnight.

The claims overshadowed Fox's first visit to Libya at the weekend during which he announced 500,000 pounds (580,000 euros, $778,000) new funding for the National Transitional Council's fight against arms proliferation.

Fox, 50, ordered the MoD inquiry on Friday into claims that 34-year-old Werrity, his former flatmate, posed as his advisor and had privileged access to him, despite having no official government role or security clearance.

But the row intensified as The Observer newspaper carried footage on its website of Werritty apparently being allowed to attend a meeting between Fox and Sri Lankan President Mahinda Rajapakse in London in 2010.

Several newspapers also reported that Werritty had brokered a meeting in Dubai in June between Fox and a company hoping to sell phone call encryption technology to the British military.

They discussed the possibility that British soldiers from Afghanistan use it to call home without being detected by the Taliban, or allowing Libyan rebels to use it to avoid detection by Moamer Kadhafi's forces, the Financial Times said.

Speaking in Tripoli, Fox said the Dubai meeting came about by chance while he was on a stopover from Afghanistan.

"Actually the defence industry representatives asked for it when they happened to be sitting at a nearby table in a restaurant, so it's not that unusual," Fox told the BBC.

"But with these questions, they're all reasonable questions for people to ask and I don't mind that and that's what you get in a democratic society."

Fox was a contender for the leadership of the Conservative Party in 2005 but lost to Cameron and is known to be on the right of the party. He has been defence minister since May 2010.

In London, Cameron's spokesman initially said he would wait for the outcome of the MoD inquiry, led by the ministry's top civil servant.

But as the row gathered pace, Downing Street said Cameron had asked the head of Britain's civil service to look at the initial findings of the MoD inquiry "and report his conclusions to him on Monday," a spokeswoman said.

Fox admitted this week that he met Werritty on an official visit to Sri Lanka in July, and the revelation that Werritty visited Fox 14 times in 16 months at the MoD in London.

According to The Independent, the Financial Times and The Guardian, Werritty set up a meeting with Fox and members of the Porton Group, including chief executive Harvey Boulter, while Fox was in Dubai on official business in June.

Citing Boulter, the newspapers said much of the meeting involved a discussion of Cellcrypt, a technology developed by one of the group's companies which they were interested in selling to the MoD.

The Observer newspaper printed emails from Werritty to Boulter in which he appeared to have been trying to set up a meeting with Fox in April.

The Times reported that Werritty had printed up business cards with a parliamentary seal saying he was Fox's advisor.

Jim Murphy, defence spokesman for Britain's opposition Labour party, called for Fox to make a full statement to parliament on the issue.

"The Secretary of State's version of events appear to be unravelling and he now has even bigger questions to answer," he said.