International trade minister Mark Garnier, who admitted asking a former aide to buy sex toys, has been cleared after an investigation.
There was “no evidence” to suggest his actions “breached the expected standards of behaviour”, a statement released from Downing Street said.
The probe concluded neither party disputed the facts but that there was a “significant difference of interpretation”.
“The member of staff in Mr Garnier’s office was distressed by what had occurred,” Number 10 said.
“It was not his intention to cause distress, and Mr Garnier has apologised unreservedly to the individual.
“On that basis the Prime Minister considers that a line should be drawn under the issue.”
The Cabinet Office investigation was launched in October after married father-of-three Mr Garnier conceded some of his actions “look like dinosaur behaviour”.
But he strongly denied that it constituted sexual harassment.
He claimed his reference to ex-aide Caroline Edmondson as “sugar t***” was part of “an amusing conversation” based on TV comedy Gavin & Stacey, which uses the phrase.
And he described asking Ms Edmondson to buy sex toys as “good-humoured high jinks” after a Christmas lunch.
Mr Garnier said he told her he did not think it was a good idea.
Ms Edmondson, who stopped working for the MP shortly after the incidents in 2010, disputed Mr Garnier’s version of events, telling the Mail on Sunday earlier this year: “He has lied.”
She told Sky News on Thursday that Mr Garnier had since written her a letter apologising and that she hoped her actions would encourage young people at risk of intimidation in Parliament to speak out.
Ms Edmondson said: “I do feel very, very strongly that I’ve seen and witnessed a lot of awful bullying of younger people in Westminster.
“I’m hoping that if I speak out we’ll get a proper HR department and the things that happened to me will not happen again.”
She added: “I just think it’s too easy – I think the problem with MPs and Parliament is they have a huge amount of power and if they decide what’s going to happen, that they’ll normally find a way to make it happen.”
Mr Garnier’s behaviour was revealed at the height of the Westminster harassment scandal, which has seen several Tory and Labour MPs suspended.
The investigation’s conclusion comes after Prime Minister Theresa May lost her long-standing friend and political ally Damian Green.
He was sacked as First Secretary of State – her de facto deputy – for “misleading” statements about his knowledge of claims pornography was found on his parliamentary computer.