So when they started trading insults while presenting the GQ Awards in London Tuesday, it was a little hard to figure out if they were for real — especially since Lily had had clearly had a glass of champagne or two.
Some reporters even wrote that there was a feud brewing over it, but today the Smile star set the record straight on her MySpace blog — and she says everything is alright still between the stars.
"Now it’s all died down i’m saying my side of what I can’t believe is considered to be a story.
"Elton john and I are friends. I was honoured when Elton asked me to present the GQ awards with him this year in association with Elton’s AIDS foundation.
"Not only was it for a good cause but who would say no to Elton.
"I’m not defending my drunkeness because i don’t need to, i’m 23 it was an awards ceremony i drank the free champagne, how awful of me.
"Trying to create a feud on the other hand, and trying to make me out as being some rude little girl with a drink problem is just unfair, Elton and I exchanged jokes and there were no hard feelings at all, in fact neither of us gave it a second thought."
And as for the rumor that her brother Alfie and his girlfriend Jamie Winstone were furious after she announced that they were engaged during the show?
"Alfie and Jamie had never been engaged, Jamie and I are the best of friends and I was just winding Alfie up , he’s my little brother and that’s what siblings do.
"Jamie wasn’t p***ed off with me, if she was i would have known about it, believe me."
For access to all our exclusive celebrity videos and interviews – Subscribe on YouTube!