The 65-year-old singer said he could not afford to bring up Sarah Streeter when he was an unknown 17-year-old vocalist.
"I was absolutely stone broke, I didn't have a pot to p*** in," he said. He also joked that he was not ready to be a teenage father because he was "a little bit stoned".
Stewart, whose wife Penny Lancaster is currently pregnant with his eighth child, opened up about his relationship with Sarah during an appearance on Joy Behar's US chat show.
The singer explained that he made little effort to be a part of his eldest daughter's life at first, because he did not want to "upset the apple cart".
But when Sarah's adoptive parents died, the Maggie May singer began attempting to build bridges.