At Cowboys, the two were reportedly behaving like "smooching teenagers" in full view of fellow team members.
The duo were friends before going to Leeds University, one friend told Britain's Daily Mail newspaper.
"During her second year they became more than just friends. They weren't officially a couple but everyone knew they were together and they didn't hide it."
The friend said Tindall and the woman were quite "tactile" on nights out while together.
The blonde reportedly made a play for the rugby star who was too drunk to get up off his chair at some stages.
"She's a very good-looking girl and she knows it. She goes over and kisses him and tries to drag him up to dance but you can see he's too trashed to get out of his seat - so she leaves him there and comes back to him from time to time."
Tindall had insisted he went back to his hotel alone but he has now had to confess that he and the woman went on to the second bar and has apologised for denying being at Cowboys.
His public relations company, Juniper Sport, sent out a statement pinning the blame on him and said it, the Rugby Football Union and solicitors had relied on his assurances.
"However, Mike now accepts that his recollection was incorrect and he apologises unreservedly for this misjudgment."
The hunt continues for the blonde, who has still not been identified.
England manager Martin Johnson said any misleading information Tindall gave as to his whereabouts that night was a simple mistake and 'not a cover-up.'
"If he was inaccurate in his recollection of the events of the night and his specific whereabouts, he certainly didn't mean to mislead anyone. It was not an orchestrated cover-up. It was simply an error on his behalf which he apologises for," he told the Daily Mail.
The latest claim comes hot on the heels of more revelations of bad behaviour by members of the England rugby team while in New Zealand for the Rugby World Cup.
Johnson had to pull three more members of the team into line after complaints from Dunedin hotel worker Annabel Newton.
James Haskell, Dylan Hartley and Chris Ashton were made to apologise after making lewd remarks to the woman.
Johnson said he was angry with the trio over the events during England's stay at the Scenic Southern Cross - after repeated warnings to the squad about the need to take care with their conduct.
"It is just the sort of thing we have talked about. What they thought was humour and a light-hearted exchange has clearly not been taken that way by Annabel, the girl involved.
"At the time they apologised when they realised they had stepped over the mark. They had no idea how upset she subsequently became. We investigated the facts fully," he told the Mail.
He said it was not a good look for the England team and revealed that the other players were unhappy with their teammates' behaviour.
And on top of all of that, England utility back Delon Armitage will miss the RWC quarter-final against France after he was given a one-week ban today for a dangerous high tackle during last weekend's match against Scotland.
* Former Altitude bouncer Jonathan Dixon appeared in court today charged over the release of the footage of Tindall and the mystery woman in Altitude Bar.
The 40-year-old denied one charge of accessing a computer system and dishonestly obtaining video surveillance footage last month.
He will reappear in Queenstown District Court for a status hearing on October 17.
