Blatter appeared to stand by his suggestion that racism on the pitch should be settled by a handshake in an interview with Fox Soccer today - despite Cameron's criticism which followed sports minister Hugh Robertson's call for the 75-year-old to step down.
The FIFA president also became embroiled in an amazing Twitter row with England defender Rio Ferdinand, who accused the Swiss of being "ignorant".
Cameron said: "It's appalling to suggest that racism in any way should be accepted as part of the game.
"A lot of work has gone into ridding racism from all aspects of our society, including football. As many of our top sports stars have rightly pointed out, now is not the time for complacency."
Outside of Britain however, the controversy has barely caused a ripple - it merited a single paragraph in French sports daily L'Equipe, and was treated similarly in Spain, Italy, Germany and the United States.
In an interview with Fox Soccer, Blatter stuck to his guns and pointed out that FIFA had taken the World Cup to South Africa.
He added: "But if you also be a little bit in a sporting spirit when there is something happening on the field of play, during a match between two players - I call it foul language. I'm not saying about discrimination, but it's foul language, it's a foul play.
"At the end of the match, if you have foul play (when) the match is over you shake hands... and therefore also forget what has been on the field of play."
The furore has been heightened by the fact there are two high-profile current cases in England involving alleged racism on the pitch.
Chelsea's John Terry is being investigated by the Football Association and the police after allegations he racially abused QPR defender Anton Ferdinand, Rio's brother, and the FA yesterday charged Liverpool's Luis Suarez with racially abusing Manchester United's Patrice Evra.
Blatter's remarks led to a Twitter war of words with Ferdinand. The Manchester United defender criticised FIFA's attempts to clarify Blatter's comments with a statement on their website underneath a large picture of Blatter with South African minister Tokyo Sexwale, who was imprisoned on Robben Island during the apartheid era.
Ferdinand wrote: "Fifa clear up the blatter comments with a pic of him posing with a black man..I need the hand covering eyes symbol!!"
Blatter was stung into a response today and replied directly to Ferdinand saying: "The 'black man' as you call him has a name: Tokyo Sexwale. He has done tremendous work against racism and apartheid in Africa.
"We have done several joint activities to raise awareness on the struggle against racism in South Africa. FIFA has a long standing and proud record in the area of anti-discrimination which will continue."
Ferdinand responded himself to Blatter this afternoon, saying: "To say what you said about racism in football spoke volumes of your ignorance to the subject.
"If we want 2 stamp out racism in society a football pitch is a good place to start - loved by billions of people around the world."
Meanwhile, sports minister Hugh Robertson and players' chief Gordon Taylor called for Blatter to step down.
Robertson said: "Sepp Blatter's comments are completely unacceptable. This is the latest episode that calls into question whether this man should be the head of world football.
"For the sake of the game, he should go."
Professional Footballers' Association chief executive Taylor said the racism remarks were "the straw which broke the camel's back" and that Blatter should step aside for UEFA president Michel Platini.
Taylor said: "Coming on top of his comments which were offensive about female footballers, his homophobic comments about homosexuals not going to Qatar, the World Cup bidding process, he won't have technology over goal-line decisions and the corruption which is so plainly evident at FIFA. It is time for him to go."
The international players' union FIFPro described Blatter's comments as "rather clumsy" and said there should be closer co-operation with FIFA in the fight against racism."