The row came as the body of Mandela arrived yesterday at his ancestral home of Qunu in South Africa's Eastern Cape, where it was greeted by singing and dancing by local residents ahead of the anti-apartheid leader's state funeral today.
Earlier yesterday, Tutu, a Nobel laureate who has strongly criticised the government, said in a statement that he would not be attending Mandela's funeral, even though he wished to pay respects to his long-time friend.
He said he was not invited - an apparent snub that the government vehemently denied.
"Much as I would have loved to attend the service to say a final farewell to someone I loved and treasured, it would have been disrespectful to Tata (Mandela) to gatecrash what was billed as a private family funeral," Tutu said.
"Had I or my office been informed that I would be welcome there is no way on Earth that I would have missed it."
But by late last night a spokesman for the veteran anti-apartheid campaigner confirmed that Tutu would now attend. "Tutu will be travelling to Qunu early Sunday morning to attend Tata Madiba's funeral," insisted Roger Friedman.
Even at the height of the rancour yesterday, Mac Maharaj, a spokesman for the South African presidency, said Tutu was on the guest list and that he hoped a solution would be found that allowed Tutu to attend.
"Certainly he is invited," Maharaj said. "He's an important person."
He said he did not know if Tutu had been invited to eulogise Mandela but was certain an invitation had been issued.
Tutu has preached at the funerals of most major anti-apartheid figures, including Steve Biko and Chris Hani.
The spat highlights again what have been occasional frictions between Tutu and the current government of President Jacob Zuma.
Two years ago, Tutu, an anti-apartheid hero often described as South Africa's conscience, slammed the ANC-led government as disgraceful for not issuing a visa to the Dalai Lama. He said it was worse than the country's former oppressive white regime.
At that time, South African foreign ministry officials denied they stalled on the visa because of pressure from China, a major trading partner.
Before April 2009 elections in South Africa propelled Zuma to the presidency, Tutu had said he was so sceptical of the ANC leader he was considering not casting a ballot.
Tutu worked closely with Mandela and served as one of the anti-apartheid struggle's most visible public figures during the 27 years when Mandela was imprisoned.
Tutu was also the chairman of the Truth and Reconciliation Commission created by Mandela's government which investigated apartheid atrocities.