ASUNCION Paraguayan President Fernando Lugo admitted on Monday he fathered a child when he was still a Roman Catholic bishop, as the scandal threatened to weaken him politically.
Lugo, a 57-year-old leftist, said in a televised address that he had an affair with a woman who is now 26, and conceded he was the father of her child.
"I assume all responsibilities ... and I recognise paternity," Lugo said.
Lawyers for the baby's mother filed a paternity suit against the president last week, saying that Lugo met and seduced her when she was 16 and then continued a relationship with her. The child, a boy, is almost 2 years old.
The suit kicked up a media storm that has damaged Lugo's image, but the boy's mother later told reporters she had not signed any complaint and had not authorized the lawyers to file it on her behalf.
Lugo won the presidency last April at the head of a coalition that ended more than 60 years of corrupt rule by the Colorado Party in the poor South American country.
He had served as a bishop for 10 years in the impoverished region of San Pedro and shed his cassock in late 2006 to launch his political career despite church opposition.
The Vatican at first rejected his petition for layman's status, suspending him from priestly duties but saying he was still a bishop since his ordination was a lifelong sacrament.
It changed its position after he won the election, and Pope Benedict granted an unprecedented waiver to allow him to serve as president without violating church rules.
Paraguay's opposition could use the scandal to weaken Lugo and deepen splits in his coalition, especially as some of his allies had said the lawsuit was part of an opposition plot.
"A lot of Lugo's lies are coming out with this. It's shameful and even more shameful is that they are trying to call it a conspiracy," said Victor Bogado, an opposition congressman with the Colorado Party.
The impact of the scandal could depend on whether Lugo broke the law, as the legal age of consent in Paraguay is 17.
"We'll have to see what details come out. The age of the young woman when the relationship began and whether he abused the confidence of her family are legal issues that could even lead to an impeachment," said political analyst Jorge Pablo Brugnoni.
According to the lawsuit, Lugo and the mother of the child met when he was bishop in San Pedro and stayed in the house of her godmother.
Some voters applauded the president for admitting he was the child's father, but said the affair would hurt him.
"I think he was very brave. He's being correct and responsible but it will affect his image and the church's because of the double standard," Ana Albospino, a 40-year-old teacher, told Reuters in downtown Asuncion.
Paraguay's Catholic leadership did not immediately react to Lugo's announcement, although some individual bishops did.
"It's a tough blow for the Catholic Church and a bad example that will make people lose confidence in the institution," said Bishop Ignacio Gogorza in the Ultima Hora newspaper.
Lugo won the presidency on campaign pledges to end Paraguay's notorious corruption and push through land reforms to allow more landless peasants to hold plots.
He has focussed on social policies and tried to strengthen small businesses and peasant farmers, but has struggled to push through policies due to fierce opposition from other parties in Congress.