John Prescott has apologised for failing to pay Council Tax on his grace-and-favour home - after the error was exposed by Midland MP Caroline Spelman.
The Deputy Prime Minister - the Cabinet Minister responsible for the council tax - said the taxpayer had footed the bill for the Westminster flat for eight years, because of a "genuine misunderstanding".
He admitted failing to pay following a long-running inquiry by Meriden MP Mrs Spelman, his opposite number in the Conservative Shadow Cabinet.
She posed a series of Parliamentary questions, starting last June, and made six requests for information under the Freedom of Information Act last August.
However, Mr Prescott said he had not realised there were any problems with his council tax payments until yesterday.
The Deputy Prime Minister has lived rent-free since 1997 in Admiralty House, the 18th century former home of the First Lord of the Admiralty near Trafalgar Square.
The property receives a discount on council tax, and only #3,830.52 has been due since then.
But Mr Prescott admitted yesterday that even this sum had been paid out of public funds.
The Government had been paying the bills on the flat before he moved in, and continued to do so once he was living there. He has now apologised to the House of Commons and reimbursed the government departments that were paying the bill.
In a written statement to the House of Commons, Mr Prescott said: "In 1997, the Government carried on paying council tax as before on the flat and claimed a discount on a second home/company basis.
"This was not confirmed with me and nor was any advice given to me at the time.
"On reviewing the situation, I am now aware that an inadvertent error has occurred, based on a genuine misunderstanding."
Mr Prescott has further insisted future Council Tax bills are sent straight to him personally.
Mrs Spelman, Shadow to the Deputy Prime Minister, said: "At a time when pensioners are being jailed for not paying their Council Tax, the public will find it galling that the man who has forced up their bills hasn't had to pay it himself."