Katona appeared on the show to promote her new MTV1 documentary 'Whole Again', which follows her as she spends £15,000 to regain the figure she had before giving birth to four children.
Interviewed by hosts Fern Britton and Philip Schofield, she struggled to articulate her thoughts and words clearly -- something she subsequently blamed on prescription medication.
After chatting for a few minutes about 'Whole Again' and the surgery, Schofield appeared increasingly worried. Eventually he said: "We've known you for a very long time and if I'm honest now, you don't seem right to me, sitting here. Your body... fantastic, you've got the body sorted, but your speech is a bit slurred. How are you feeling?"
Katona replied: "Is it? That's probably because I'm on medication at night time," going on to explain she is taking a drug that helps her sleep at night.
Katona then complained: "Now this is going to be made into this huge big publicity thing."
However, Schofield defended his questioning, saying he was only pointing out what the viewing audience had already noticed, and saying that the programme had received calls from concerned viewers.
Britton raised the issue of an interview in Zoo magazine, which mentions that Katona drank a bottle of Champagne before a photo shoot. Katona protested that she was on holiday in Spain and was allowed to have a drink, and reacted with exaggerated puzzlement when Britton mentioned alcoholism.
Philip Schofield then pointed out that Katona now seemed very different to when they had met a few years earlier, which she also denied, until Schofield insisted: "No you are Kerry. Big difference."
Britton then attempted to get the interview back on track, asking Katona about what she planned for the future, to which she answered that her new perfume was coming out, as well as her new MTV1 documentary 'Whole Again'.
She also revealed there will be an MTV2 series out next year -- although would not say what it is going to be about -- and a Christmas special.
Asked about her family, Katona said that oldest daughter Molly acted like a mother hen and "did most of the work, more than I do" with changing nappies and helping out. She also promised not to make any more records saying "she wouldn't inflict that" on the public again.
Iceland said in a statement that Katona remained under contract to appear in its advertising.
The company said that it had first-hand experience of Katona taking her medication at the wrong time, but that after a short period she had been fit to resume her work. "We were unaware of her appearance this morning on 'This Morning', and it is our opinion that Kerry should not have appeared," the statement said.
Her husband Mark Croft has since denied reports that Katona was drunk during the show.
He told MTV News: "Due to the TV commitments Kerry had last night, Kerry was four hours late in taking her medication for an ongoing bi-polar condition.
"One of the side effects of her drugs is slurred speech and as Kerry took the drugs late and was up early it was particularly bad today. Kerry would like to categorically state for the record that that the only thing she drank before the show was cups of tea.
"Having answered the questions to the best of her ability, Kerry was upset at the insinuation that she was on anything other than the prescription drugs which she has always been honest about taking."
Katona previously made the fly-on-the-wall documentary 'Crazy In Love' for MTV, which included the birth of her son Max. Filming of that series had to be suspended when Katona checked in to The Priory.
However, the retailer has proven remarkably loyal to the Warrington-born star, sticking with her through numerous tabloid scandals and widespread reports that she will be dropped.
She has recently been seen filming a series of idents with Jason Donovan to support the next series of ITV1's 'I'm a Celebrity'.
Katona's publicist Max Clifford said he was "increasingly concerned" for the former Atomic Kitten singer.
He told Radio 1's Newsbeat: "There's no way she should have been allowed to do that show.
"Had I been with her, she wouldn't have done. I must admit after today and in view of what's gone on over the last couple of months, I am increasingly concerned for her health and happiness."