Defence Secretary Liam Fox insisted today he was focusing on his job amid mounting questions over the financial affairs of his close friend and self-styled adviser Adam Werritty.
New claims that wealthy backers of Dr Fox had funded Mr Werritty's work and travel appeared to "blow a hole" in the Defence Secretary's position, Labour said.
Mr Werritty will be questioned for a second time by senior civil servants investigating his relationship with Dr Fox, either today or tomorrow.
The Defence Secretary, who pulled out of a keel-laying ceremony for a new submarine in Barrow scheduled for today, said he had been attending a meeting of the National Security Council.
He said the fall of the last pro-Gaddafi stronghold of Sirte was "getting very close" in Libya, potentially bringing the conflict to an end.
"That is what I have to focus all my attention on," he told reporters as he arrived at the Ministry of Defence this morning.
"I'm continuing to do what is needed at the moment which is that the Defence Secretary focuses on defence issues."
The BBC reported Mr Werritty was being bankrolled by "a number of wealthy private clients" who shared his and Dr Fox's strong Atlanticist views.
Mr Werritty, whose links with the politician are being investigated by the UK's leading civil servant, was remunerated for "political and strategic advice", he said.
Shadow defence secretary Jim Murphy said that if Mr Werritty was being paid as an unofficial adviser - something denied by the Conservatives - it would constitute a "clear breach" of ministerial rules.
Labour leader Ed Miliband said: "This uncertainty is not good for the country.
"We've got a distracted Defence Secretary and a distracted Government.
"The questions are mounting about Liam Fox, and the best way of answering those questions is to speedily get on with the report that is being done."
Mr Miliband said Prime Minister David Cameron should have referred the inquiry into Dr Fox's conduct to an independent adviser.
"Let's get on with that report and then let's find out what his judgment is about whether Liam Fox broke the ministerial code," he said.
Shadow chancellor Ed Balls spoke alongside Mr Miliband on a visit to Futures Community College in Southend, Essex.
"This is not what our defence department should be about," he said.
"A defence secretary fighting for his own job in our most important department, this just can't go on like this."