CHERIE Blair broke down in tears last night as she tried to draw a close to the controversy surrounding convicted fraudster Peter Foster's role in buying two flats for her and her husband.

The Prime Minister's wife said she was not aware of the full details of Mr Foster's background until newspaper inquiries first began a couple of weeks ago, although she knew he had been in trouble in the past.

She defiantly stood by her controversial friend and confidante Carole Caplin, saying she had been "a great help" to her.

Mrs Blair, speaking at a Department for Education awards night, broke down as she defended her role in the controversy.

"I know I'm in a very special position," she said. "I'm the wife of the Prime Minister, I have an interesting job and a wonderful family - but I also know I am not Superwoman.

"The reality of my daily life is that I'm juggling a lot of balls in the air . . . sometimes some of the balls get dropped."

Mrs Blair said: "I now realise I made two mistakes. My immediate instinct when faced with the questions from the Mail on Sunday ten days ago was to protect my family's privacy and particularly my son in his first term at university living away from home."

She sobbed as she continued: "This instinct, which I think any mother would have, and my desire not to open myself up to any and every question which the Press should choose to ask me led to this misunderstanding in the Press office and I think they know I did not in any way set out to mislead them."

Mrs Blair went on: "The second mistake I made was to allow someone I barely knew and had not then met to get involved in my family's affairs."

She went on: "Throughout all of this I have only wanted to protect my family and to help my friend Carole.

"I am sorry if I have embarrassed anyone but the people who know me well know that I would never want to harm anyone - least of all Tony or the children or the Labour Government or misuse my position in any way."

She added: "Sometimes I feel I would like to crawl away and hide, but I will not."

Although Mrs Blair admitted telephoning Mr Foster's solicitors to ask about his deportation proceedings, she denied any allegations of attempting to influence procedures. She only wanted to reassure Ms Caplin that the normal process was being followed.

After making her statement Mrs Blair, clearly emotional, briefly left the reception in London's Millbank, to compose herself.

She later returned to a side room where she talked with close aides before intending to carry on with her evening presenting awards on schedule.

Her dramatic intervention last night showed the scale of the controversy surrounding her now engulfing Downing Street.

She acknowledged in her remarks that it was "not fair to Tony or the Government that the entire focus of political debate at the moment is about me".

Mrs Blair also addressed the question of the use of the Blair family so-called blind trust to purchase the two flats in Bristol where the couple's eldest son, Euan, is at university.

She emphasised that the property was purchased in an entirely lawful way and said the blind trust consisted of the money from the sale of the family home in Islington, sold when her husband became Prime Minister in 1997.

"When we bought the flats we were advised that the trust would be the safest way to keep the Blair name off the land registry for security reasons."

Earlier, No 10 had sought to portray Mrs Blair as the latest innocent victim of fraudster Mr Foster, and the target of a media "character assassination" plot.

Shadow Deputy Prime Minister David Davis expressed sympathy for Mrs Blair, but insisted her speech left key questions unanswered and called for an independent review of the incident.

"Conservatives made a policy decision to stay out of this in the first instance, because it appeared to be a private matter to her and her family."

But it had become clear that the Downing Street media machine had been used to mislead the media, and there were issues over the blind trust and possible interference in Mr Foster's deportation.

Mr Davis said: "Cherie Blair has, I think, been asked to do this by Number 10 in order to try and draw a line under it. Probably because they realise that these three other major issues are ones which are very serious.

"Actually they can't be answered by Cherie any more. They can only be answered by someone who is independent of Number 10, outside the machine.