Downing Street continued to insist that Mr Prescott's affair was a private matter and said the Deputy Prime Minister had not offered to resign and nor had he abused his position.
Tony Blair's spokesman said: "Since we have said this is a private matter, it would be entirely wrong for me to speak about this. Any discussion between the Prime Minister and the Deputy Prime Minister remains private. In terms of the particulars of this case, John Prescott has set them out and that's the end of the matter."
Asked if Mr Prescott had offered to resign, the spokesman replied: "No. Not that I'm aware of."
Asked if the Deputy Prime Minister had abused his position by having an affair with a civil servant, Mr Blair's spokesman replied "no".
Asked if Mr Prescott had now become a joke figure, Mr Blair's spokesman replied: "What you don't see is the vital role delivered by John Prescott in terms of coordinating Cabinet committees, in terms of driving forward the agenda under the Prime Minister.
"John Prescott delivers that role in a way that does deliver real benefits for the Government and real benefits for the people."
Asked about the cumulative impact of recent controversies on the Government, Mr Blair's spokesman said: "Government is about dealing with unforeseen events and the important thing is, do you have the capacity to respond to events and do you have the capacity to implement the manifesto on which a Government was elected and the vision to keep that going despite events?
"You don't under-estimate the impact of events but you don't allow them to distract you from the big picture."
Phil Woolas, Local Government Minister in the Deputy Prime Minister's department, said he had been unaware of Mr Prescott's affair and denied that it had been common knowledge around Whitehall.
"I think it is a private matter for the Deputy Prime Minister," he said at a Labour Party local election press briefing in London.
"I have worked for him for many years and have every confidence in his ability, not just as a public spokesperson for the Government but as the chair of Cabinet committees and as deputy to the Prime Minister. He is one of the most incredibly able politicians I have worked with. I am very proud to work with him."