UPDATE 2-UK PM Cameron backs embattled defence minister Fox
* PM Cameron chastises but backs Fox, awaits full report
* Defence secretary apologises to parliament
By Mohammed Abbas
LONDON, Oct 10 (Reuters) - British Prime Minister David Cameron said on Monday his Defence Secretary Liam Fox made "serious mistakes" in his dealings with a friend with business interests in the industry but backed him pending a full report into his conduct.
Fox's future had been in doubt over media and political accusations of risking national security by granting high level access to his former flatmate Adam Werritty, who has no official post within the defence ministry but presented himself as an adviser to Fox.
Cameron's comments came after an interim report on Fox's ties with Werritty, a close friend, found that the two men had met more times than previously disclosed -- 40 times over the past 18 months. At least one meeting involving a foreign official was "inappropriate".
"It is clear ... that serious mistakes were made in allowing the distinction between professional responsibilities and personal loyalties to be blurred - and this has clearly raised concerns about impropriety and potential conflicts of interest," Cameron's office said in a statement.
However, the statement said the interim report indicated Fox did not discuss or give classified or other official defence-related information to Werritty, relieving pressure on Fox until the full report is published on Oct. 21.
Cameron had earlier on Monday, before reading the interim report, offered Fox his support and praised his performance.
"First of all let me say Liam Fox does an excellent job as secretary of state for defence," Cameron told the BBC. "He gives that department good leadership."
In a sign that Fox has been chastised, but is not expected to resign, a spokesman for Cameron said the prime minister's support still stood, at least until the full report is out.
"His support still stands. He said he would not reach a judgement before he has the facts, and that still stands," the spokesman said.
HARD POLITICAL CALCULATION
If the stream of media reports about Fox and opposition pressure persists, Cameron will have to make a hard political calculation about whether to stand by him or abandon him.
Removing Fox, seen as a right-wing "neo-con", from the cabinet could upset the delicate balance of the coalition government and anger right-wingers in Cameron's Conservative Party who already think he has made too many concessions to his Liberal Democrat junior coalition partners.
Fox apologised to parliament on Monday, and gave a detailed account of his dealings with Werritty, who was best man at his wedding, adding that he would keep his distance from him during official ministerial business in future.
"I accept that it was a mistake to allow distinctions to be blurred between my professional responsibilities and my personal loyalties to a friend. I am sorry for this. I have apologised to the prime minister, to the public, and at the first opportunity available, to the house (of commons)," Fox told parliament.
Fox on Sunday denied helping Werritty's commercial work, giving him access to secret information or personally profiting from the relationship.
The interim report by a top civil servant into Fox's dealings with Werritty confirmed that the two men had met 22 times at the Ministry of Defence, more than the 14 occasions previously disclosed. They also met 18 times on overseas trips, including family holidays.
The report said Werritty attended at least one meeting Fox had with a visiting foreign official, and that Fox had accepted this was "inappropriate". The report also said Werritty had been given access to Fox's diary details.
As defence secretary, Fox is responsible for the 10,000 British troops in Afghanistan and Britain's leading role in the NATO air campaign against Muammar Gaddafi's supporters in Libya.
His department is also in charge of awarding and managing billions of dollars' worth of defence contracts.
The most potentially damaging details outlined by Fox in parliament and the report was a meeting Werritty and a lobby firm had arranged with businessman and potential defence equipment supplier Harvey Boulter in June in Dubai.
"I accept that I should not have had a meeting with a potential commercial supplier without an official being present. This was entirely my fault and I take full responsibility for it," Fox told parliament.
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