The New Zealander today broke his silence on the controversy which has seen the American world No 1 take a break from the game.
Woods yesterday announced he was taking an "indefinite break" from golf to try to save his marriage after allegations of rampant affairs.
Williams told Sunday News newspaper that the escalating scandal had placed pressure on his own wife and family and he was angry that a leading American sports writer claimed he should be sacked as Woods' caddie because it was hard to believe the affairs could have gone on without his "help or knowledge".
Williams said Woods had admitted to him he had "a problem".
"Obviously, I understand Tiger has got a problem. And we (Woods and Williams) discussed that."
Williams told the newspaper he had no knowledge of Woods' list of lovers.
He said anyone who doubted his sincerity did not understand Woods' "indiscretions" happened while Williams was back with family in New Zealand.
"What people fail to realise is I (just) work for Tiger Woods," he said. "I live in New Zealand, I travel to and from New Zealand to caddie for Tiger Woods. I am not with him 24/7. Whilst I am a very good friend of his ... I don't know what he does off the course. Some nights we go to dinner. His indiscretions have probably been (when he wasn't playing).
"When he is not competing, I am back in New Zealand. I have no knowledge of what he is doing."
Respected American sports columnist Rick Reilly wrote in a column in ESPN, The Magazine, that Williams was among those who would have to go if Woods was to save his marriage to former Swedish model Elin Nordegren.
"If he wants to keep his wife, he has to get a new agent, a new caddie and some new friends. It's hard to believe all this went on without their help or knowledge," Reilly wrote.
Williams offered his "heartfelt wishes" to Nordegren, and reiterated his ignorance of the affairs.
"I am a straight-up sort of person. I tell it like it is," Williams said. "I had no knowledge of what Tiger's indiscretion was. And for Rick Reilly to turn around and say that I am a liar and there is no way I couldn't know -- and that I should be fired -- that is sensational journalism at its height right there.
"I am an honest person. I had no knowledge of what was going on [with Tiger]. If I did, I would say I did." He said Woods' announcement that he was taking a break to "focus my attention on being a better husband, father, and person" did not surprise him.
"Tiger just said he needs a break and I don't want to put any pressure on the guy," he said. "He will know in his mind, and his family will know in their mind, when it is the right time for him to return to playing golf. He will have the right people counselling him and between the people that counsel him, his wife and his immediate friends, when he is ready to come back he will be ready to come back."
Williams said if he was ever axed by Woods, that would mark the end of his caddying career.
"I have always stated that my last caddie job will be caddying for Tiger," Williams said. "I am committed to him. I understand he needs a break to sort his personal stuff out. And I will be there for him when he wishes to return to play."