The singer, 15, tells PEOPLE: "My goal in my music and my acting is always to make people happy. For Vanity Fair, I was so honored and thrilled to work with Annie [Leibovitz]. I took part in a photo shoot that was supposed to be 'artistic' and now, seeing the photographs and reading the story, I feel so embarrassed."

A source close to the singer tells PEOPLE that Cyrus is clothed but shown by renowned photographer Annie Leibovitz in such a way that that the teen appears to be topless.

In the photos that circulated on the Internet, Cyrus, her midriff exposed, is shown draped over the lap of her then-boyfriend, her producer's son. In another image, a hint of a green bra is evident. (Those photos alone prompted criticism from conservative TV commentator Bill O'Reilly, as well as words of support from the Jonas Brothers and a fellow Disney star.)

Cyrus goes on to say: "The pictures of me on the Internet were silly, inappropriate shots. I appreciate all the support of my fans, and hope they understand that along the way I am going to make mistakes and I am not perfect. I never intended for any of this to happen and I am truly sorry if I have disappointed anyone.

"Most of all," she says, "I have let myself down. I will learn from my mistakes and trust my support team. My family and my faith will guide me through my life's journey."

Disney Channel Statement
In its own statement about the Vanity Fair story, the Disney Channel, which broadcasts Cyrus's series Hannah Montana, said: "Unfortunately, as the article suggests, a situation was created to deliberately manipulate a 15-year-old in order to sell magazines."

Describing the photo session to PEOPLE, a source close to Cyrus reiterated the teen's excitement at working with Leibovitz, and also said of the shoot: "Her parents were there all day. [Father] Billy Ray shot, too."

Though Cyrus's parents left before the final shot, with Miley supposed to be appearing topless, the source said: "Miley's grandmother and her teacher were there when she shot it. Annie convinced them it was going to be artistic. Her parents are mortified. They know this is a learning moment for Miley.

"The photo suggests that she is [naked], but she is not. She is covered by a sheet, and beneath the sheet she is clothed. Originally, she was in a flesh-colored tank top but was asked to remove it."

In a statement to The New York Times, Beth Kseniak, a spokeswoman for both Vanity Fair and Leibovitz, said: "Miley's parents and/or minders were on the set all day. Since the photo was taken digitally, they saw it on the shoot and everyone thought it was a beautiful and natural portrait of Miley."

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(Source: People.com)