Russian president Vladimir Putin this weekend threatened to raise cash-for-honours allegations with Tony Blair at the G8 summit in St Petersburg.
The Prime Minister held private talks with Mr Putin, who is chairing the first gathering to be held in his country.
Asked on Saturday about how he would deal with questions about human rights in Russia, Mr Putin took a side-swipe at the Prime Minister's difficulties at home.
"There are also other questions, questions let's say about the fight against corruption," said Mr Putin.
"We'd be interested in hearing your experience, including how it applies to Lord Levy." His comments follow the arrest of Labour's chief fundraiser by police investigating whether financial support for political parties was rewarded with gongs.
Asked about the jibe yesterday, Mr Blair brushed aside questions saying: "I'm sure we will have a discussion on a full range of international issues."
Asked if he expected Mr Putin to raise the subject of Lord Levy, the Prime Minister replied simply: "No."
Mr Blair's official spokesman later claimed Mr Putin's remark was intended to be humorous. "I think if you look at what President Putin says he has a joke for each and every leader and we haven't lost our sense of humour," he added.
Meanwhile Mr Blair faced fresh questions over his role in the cash-for-honours affair with a report that he had a secret meeting with a witness during the police invstigation.
Downing Street declined to comment on the Independent on Sunday's claim that Mr Blair held talks with Sir Gulam Noon within the last four weeks.
Sir Gulam is one of Labour backers whose nomination for a peerage was blocked by the House of Lords Appointments Commission.
It has been alleged that the curry entrepreneur, who lent Labour £250,000 before last year's General Election, was told by Lord Levy that he need not declare the loan in his Lords vetting papers.
He therefore retrieved the papers from Downing Street and submitted them again, having removed any mention of the loan, the BBC claimed last week.
The Independent on Sunday said that Lord Levy had given the same advice to Chai Patel, another Labour donor.
It suggested that Sir Gulam might still receive a peerage in the Prime Minister's resignation honours list, which might not be vetted.
The paper also claimed that Mr Blair sent hand-written notes to two other Labour donors, Barry Townsley and Sir David Garrard, after their peerages were blocked.
In an interview with The Politics Show, Mr Blair also tried to dismiss speculation about when he would quit Downing Street.
Asked whether he was looking forward to the G8 summit - to be held in spring or summer 2007 - Mr Blair said: "I have made it clear all the way I carry on doing the job. So I look forward to next year's G8, of course. But in the end the most important thing is to do the job."
On the cash-for-honours row, Mr Blair indicated that the current furore could lead to a change of "all the rules".
He said: "In the end, whatever the rules are, it's important that we abide by them.
"Now, if people want to change the rules in relation to party funding, fine.
"Although I just do say this to people that if, and it may well be the case that as a result of all this we change all the rules in relation to party funding, probably what you will find is that political parties come and ask for more taxpayers' money."