George Osborne attempted to escape from the shadow of the Deripaska affair yesterday by admitting that he made a mistake in his handling of his links with the Russian billionaire.

Nearly a week after the controversy erupted with Nathaniel Rothschild's letter to The Times, the Shadow Chancellor said: “To be honest this did not look very good and that is something I regret.”

Although statements on economic subjects have been issued on Mr Osborne's behalf in recent days, he has been seen in public only rarely as Tory aides have tried to limit the damage over last week's disclosures. But, with the economy dominating politics and Gordon Brown speaking yesterday of the need for increased borrowing in a recession, Mr Osborne broke his silence and tried to draw a line under the issue.

He gave an interview ostensibly to talk about the economy but knowing that he would be questioned about the Corfu controversy. He confirmed that he would no longer become involved in talks with potential donors. He has always denied Mr Rothschild's claim that he tried to solicit £50,000 for the Tories from Mr Deripaska while on holiday in Corfu in August. He told The World at One on Radio 4: “I neither asked for money nor received any and I didn't break any rules, but I think I did make a mistake.”

During Prime Minister's Questions last week, Mr Brown said: “This is a very serious matter indeed and I hope it is investigated by the authorities.”

The Electoral Commission said that it would not conduct an inquiry, as “soliciting a donation is not an offence”.

Mr Osborne said: “I think the real judgment is, can you learn from mistakes you make? I have changed the way that I am going to operate when it comes to fundraising and I will not discuss individual donations with individual donors. That, I think, is an appropriate thing for me to do.”

David Cameron said that his Shadow Chancellor had made it clear that he would not be involved in the details of party fundraising any more. Pressed about what lessons the Conservatives had learnt from the row, he said: “We have all learnt lessons from this. George Osborne has been very frank about explaining what they are.”

Vince Cable, the Liberal Democrat Treasury spokesman, said: “He [Mr Osborne] did show very bad judgment in meeting this guy [Mr Deripaska] five times. If he is effectively apologising, I am sure that is the line under his particular involvement.”

Denis MacShane, the Labour MP who wrote to Mr Osborne last week demanding answers to questions about his contacts with Mr Deripaska, said: “George Osborne is still refusing to come clean with the public about the nature of the conversations he had in which donations to the Conservative Party were discussed. He has now confessed that he made an error of judgment, but for the sake of clean politics he now needs to answer the questions he refused to answer last week.”

Geoff Hoon, the Transport Secretary, said: “Now that George Osborne has admitted that he made a mistake in Corfu, when will he admit the rest of the mistakes he has made - like pledging to hike up fuel tax at the worst time for families and business?

“George Osborne's judgment is wrong and, once again, it is because he creates headlines on the hoof without care for the consequences. His mistakes just go to show why this is no time for a novice.”

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