The Prime Minister's official spokesman said Mr Brown had given a "full account" to Mr Blair and that there was no question of him resigning from the Cabinet. The agriculture minister is unmarried and has never condemned homosexuality.
In his statement, issued through Downing Street, Mr Brown said he had always wanted to keep his sexuality private, but he had been forced to confirm that he was homosexual after a tabloid contacted him about a past relationship. He said he had assured the Prime Minister and his constituents that "there is nothing in my past or present to give them any doubt in my ability to serve them and the Government."
The Prime Minister's official spokesman said: "Nick Brown has given a full account of this relationship to the Prime Minister and the Prime Minister is satisfied with that account." The agriculture minister's frank announcement was in stark contrast to the evasive answers given by Ron Davies, the former Welsh Secretary, following his resignation after an incident on Clapham Common.
Mr Brown's surprise statement, issued at 9.42pm last night said the News of the World contacted him about an affair he was alleged to have had with a man in the mid-1990s. The paper was threatening to publish the man's allegations that the minister had paid him for sex during their two year relationship.
Mr Brown, the former chief whip, confirmed that a relationship "based on friendship not simply sex" had taken place. However, he said: "I deny totally that I paid money for sex. I have never done so."
He admitted that he had given the man small sums as "gifts of friendship". However, he stressed: "I did not do so regularly. I certainly never did so for sex." The most he had ever given was pounds 80 when the man was "out of work and short of money," the minister said. "Apart from that one occasion, the most I would give him was pounds 10 or pounds 20."
Mr Brown, 48, said he was "saddened" that the man had tried to sell "false and unsubstantiated" allegations to the newspapers. "I have always wanted to keep my private life and my sexuality private. I have always believed it is a choice I and any other citizen should be entitled to make."
He added: "I am sorry that because of the account he has given to the News of the World I have been put in a position where I have had to speak publicly about this part of my life, and that people very dear to me will find out about it in this way."
The reports will reopen controversy over the private lives of ministers. The BBC has banned its staff from mentioning Peter Mandelson's private life after the gay journalist Matthew Parris alleged on air that the Secretary of State for Trade and Industry was homosexual.