The Prime Minister said the wording of Joan Edwards' will made clear her intention was for the money to "benefit the nation" rather than political parties.
The legacy, disclosed along with other donations yesterday, sparked a row after a copy of the document emerged. Conservative and LibDem officials previously briefed that they had split the money because it was earmarked for "whichever party was in government".
But the text obtained by the Daily Mail showed Miss Edwards - who died in September aged 90 - identified the beneficiary as "whichever government is in office at the date of my death".
As the backlash gathered pace, both coalition partners declared they would hand the funds to the Treasury as a gesture of good faith.
However, shortly afterwards the executors of Miss Edwards' will, Bristol solicitors Davis Wood, released a statement insisting she had indeed intended the cash to go to political parties rather than the Government.
"It was confirmed by Miss Edwards at the time of her instruction that her estate was to be left to whichever party formed the government at the date of her death, " the law firm said.
Speaking during a visit to the Commonwealth Games site in Glasgow, Tory leader Mr Cameron said: "It is a slightly confusing situation.
"But I think when you look at the wording of the will it seems to us the intention was more to benefit the nation, so what we've done is give it to the Treasury so it can help to pay down the national debt."
LibDem leader and deputy prime minister Nick Clegg personally approved the forfeiting of the party's £100,000 share yesterday.