The Guardian's parliamentary sketch writer Simon Hoggart has admitted he was having an affair with Kimberly Quinn at the same time she was seeing David Blunkett.

Hoggart, who is also the Spectator's wine correspondent, at first denied the story as reported in yesterday's News of the World, but after a two hour meeting with Guardian colleagues, he admitted to an affair which began before her marriage to publisher Stephen Quinn, and continued "infrequently" afterwards.

He added that there was "no possibility" he could he could be the father of her children.

The Telegraph reports Tony Blair is said to be watching the emerging revelations with a mixture of concern and incredulity.

The latest twist to the saga occurred as Whitehall is braced for criticism in Sir Alan Budd's report into the affair tomorrow.

A member of the government admitted officials were "nervous" about Sir Alan's likely conclusions.

"There's always nervousness. These inquiries are exposing events for officials who are not normally subject to the media spotlight. It does of course make officials nervous. In this case you have to establish what happened."

The Sunday Times reported yesterday John Gieve, the most senior official at the Home Office, told Sir Alan that Blunkett's private office had intervened to fast-track the visa only after Bill Jeffrey, head of the immigration service, threatened to come clean.