His breach of the Ministerial Code last night prompted demands for his resignation and a full investigation.
The Secretary of State for Work and Pensions failed to seek advice from an independent watchdog before becoming a director of a DNA testing firm in April. The breach came only a month after he was reminded of the rules. Mr Blunkett's spokesman last night said that he admitted "with hindsight, it might have been better if he had written to the committee."
Mr Blunkett was briefly a non-executive director of DNA Bioscience before he returned to the Cabinet after Labour's election victory on 5 May. According to section 5.29 of the official code he should first have sought the advice of the independent Advisory Committee on Business Appointments.
The watchdog, set up under John Major to stem the tide of sleaze cases under his leadership, has confirmed that the former home secretary failed to consult it over the lucrative directorship.
It also released correspondence showing that Mr Blunkett was warned in March that he had failed to consult over a previous appointment. The former minister wrote then to apologise about the "misunderstanding" over his work as an adviser to Indepen Consulting Ltd.
Mr Blunkett's failure to abide by the rules brought condemnation from the Conservatives. Chris Grayling, shadow Leader of the House, called for his resignation, saying: "There now needs to be an urgent inquiry into Mr Blunkett's conduct in relation to his business interests. There are just too many questions that have gone unanswered for it not to be looked at properly.
"Mr Blunkett's position is now increasingly untenable. I really don't see how he can carry on as a cabinet minister given all that's gone on in recent days."
Mr Grayling has written to both the Cabinet Secretary, Sir Gus O'Donnell, and the Prime Minister, demanding they investigate the breach.
A spokesman for Mr Blunkett said: "Had Mr Blunkett not returned to government, there would have been time to seek clarification in regards to the committee, accepting as he does its helpful role.
"Mr Blunkett believed that he was acting within the Ministerial Code, but with hindsight it might have been better if he had written to the committee prior to parliament returning.
"When Mr Blunkett sought the advice, regarding Indepen earlier in the year, the response from the Advisory Committee on 15 March was: 'It is right, therefore, to point out that the voluntary character of the scheme for former ministers is exactly that: it is voluntary. Accordingly, it is not necessary for you to apologise for having taken up your appointment without referring to my committee.'
"And again on 2 March: 'The system under which former ministers can seek our advice about outside appointments is a voluntary and advisory one.'
"Mr Blunkett has asked the Secretary to the Cabinet to clarify the procedure in order to avoid any confusion in the future."
Despite Mr Blunkett's protestations, the code is unambiguous, however. Section 5.29 states: "On leaving office, ministers should seek advice from the independent Advisory Committee on Business Appointments about any appointments they wish to take up within two years of leaving office."
MPs have already raised questions about his shares in the firm, which are reported to have made a profit of up to £285,000, but he insisted last week that he had not broken the Ministerial Code over the shareholdings.