'I'm proud of Cherie,' says Blair in display of defiance

Tony Blair rejected Tory demands for an independent inquiry into the "Cheriegate" affair yesterday and expressed confidence the damaging controversy had finally peaked.

The Prime Minister paid tribute to his wife the day after she made a tearful statement about her links with the convicted fraudster Peter Foster.

"It's been a horrible time for Cherie," he said. "I am very proud of what she did yesterday. It was very difficult for her. It took a lot of courage."

In the Commons, Mr Blair saw off an attack by Iain Duncan Smith, who called for an inquiry into "10 days of half- truths and evasions".

The Tories' charge was hampered by their desire to avoid personal attacks on Mrs Blair. The Prime Minister insisted all of the questions had been answered and rounded on Mr Duncan Smith, saying: "It's absolutely typical of you that you dive into the swimming pool just as the water is running out."

The Home Office confirmed last night that Mr Foster's work for Mrs Blair over the purchase of two flats in Bristol broke the special terms of his permission to stay in Britain.

Mr Blair's official spokesman said that if anybody was owed money in fees as a result of the unusual property deal, the Blairs would pay them.

The Government launched an offensive against hostile newspapers, notably the Daily Mail and the Daily Mirror. The Prime Minister said: "The freedom of the press is, and always must be, paramount. But I would hope those people who do have a personal agendabe open with their own readers about it." Clive Soley, a Labour MP, attacked Paul Dacre, editor of the Daily Mail, saying he was "cowardly and irresponsible" for keeping a wall of privacy around his own family while attacking others.