Despite appearing to take aim at the twerking pop star in her song 'Hard Out Here' - which criticises the music industry for pressuring female stars to sex up their images - the 29-year-old singer hit it off with Miley, 21, after they met recently and admires her ballsy personality.
Quizzed about the contradiction between her music and her friendship with Miley, she said: ''Because she's owning it and it definitely comes from her. She's rebelling. I love her. If you wanna put your body on display like that, it's absolutely fine. It's when somebody else tells you that you need to do that in order to sell your product that's offensive.''
Outspoken Lily, who has returned to pop after a four-year absence, admits she has to censor her controversial opinions and be more careful in what she says because she now has kids - Ethel, two, and Marnie, 15 months.
She told Britain's Glamour magazine: ''I've only got good intentions, but I'm gonna have to button it, definitely. It's not just about me any more, I've got the kids.''
Lily also lamented the double-edged sword that is social media after receiving cruel jibes.
The 'Sheezus' singer feels social networking sites ''bring out the worst in some people'', however, she also concedes grassroots efforts on Twitter and MySpace helped her find fame.
She adds: ''It made me what I am.''