Gareth has released a statement saying he was drunk when he made the comment about Simon's sexuality.
Earlier this week, Tulisa's drug charge trial collapsed and she walked free from court.
The N-Dubz star had previously denied one count of being concerned in the supply of Class A drugs following a newspaper sting and on Monday (21 July) the judge threw out the case.
He reportedly told the jury there were "strong grounds to believe" that the undercover reporter at the centre of the trial - a prosecution witness - had "lied" during a pre-trial hearing.
Before this happened, the court was shown a video in which Gareth told the reporter - Mazher Mahmood - that Simon was "gay", adding that he "knew people who have" slept with him.
Following the trial collapse, Simon released a statement denying that he is gay and saying Gareth's suggestion was "false".
Gareth has now apologised for his comments. In a statement, he said: "On 10 May 2013 in the course of seeking to entrap Tulisa, Mazher Mahmood supplied Tulisa, me and others with a lot of alcohol.
"I can no longer recall all of the details of that evening but I have listened to the recording made by Mahmood. I was clearly very drunk.
"At some point and utterly out of the blue Mahmood asked me if Simon Cowell was gay. I said he was. This is not true. I do not know why I said it, but assume it is because I was so drunk and felt that I was giving Mahmood the type of information he was seeking. I am very sorry for this."
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