Can Associates had been paying for the £5,000-a-month rented home in Surrey, after taking on and helping the 30-year-old turn her life around following her second divorce. However, after parting company with her management team, Katona claimed that she was going to be left homeless yesterday evening.
"Claire has done a very very good job for her management-wise," Clifford told ITV's This Morning. "And no, she wasn't made homeless at 5pm yesterday. Conversations have gone on and Claire has agreed that the rent will be paid for another month to give her time to sort out where she's got to go.
"Obviously her children are all in school down here and are all settled and doing very well down here so hopefully common sense will somehow come in to this, but financially she's in a real mess with the bankrupts and the split-up in her management."
The PR guru continued: "The bad news is that her finances are in a real mess. And the fact that her manager Claire and her partner have split up and she has somehow got caught up in the middle of that.
"The good thing is she came to see me last week, she's looking really healthy, she's really happy, she's facing up to her problems, the kids are a joy to behold - as a little mum you can't criticise her for what she's done with no help from Brian McFadden and no help from Mark Croft, she's done that on her own. She hasn't taken drugs, she promises me, she had a drugs test in my office last week to show to everybody, so that's the good news."
On the split from Can, Clifford said, "The split basically is the split between Claire and her partner who ran Can Associates, so there was Neville on the TV side and Claire on the management side, so they've fallen out and she's [Kerry] is in the middle."
Clifford told hosts Phillip Schofield and Jenni Falconer that Katona wants to appear on the daytime show to "talk about it all" later this week.
Watch Digital Spy's interview with Kerry Katona from March 2011 below:
> Kerry Katona: 'Drugs no part of management split'