Mark Spencer was accused of faith-based discrimination in 2020 by MP Nusrat Ghani, who said he had cited her “Muslimness” as a reason for her being axed as transport minister during a Cabinet reshuffle.

But Prime Minister Rishi Sunak, on the advice of ethics adviser Laurie Magnus, said it was not possible to verify whether Spencer had made the comments.

In his report to Sunak, Magnus said: “Despite a review of considerable evidence, it has not been possible to draw a clear picture of what was discussed between Mr Spencer and Ms Ghani during two meetings which both agree took place on 4th and 23rd March 2020.

“These discussions are central to the allegations made. Ms Ghani and Mr Spencer have differing accounts of these meetings, with different recollections of what was said.

“Each has provided evidence (including some contemporaneous notes) to support their respective accounts, but given the differing evidence presented to me, I am not able to conclude with sufficient confidence what was or was not said at these two meetings.”

But Spencer was cautioned over “shortcomings” as a result of his response to Ghani’s allegations.

He “should have taken more care,” Magnus said, citing the MP’s use of Twitter to dismiss the accusations based on a claimed previous investigation.

Last year, Ghani said that during her departure as transport minister, she was held to a “higher threshold of loyalty” because of her background and faith, and that Spencer’s alleged comments “felt like being punched in the stomach.”

She added: “I felt humiliated and powerless. I was told that at the reshuffle meeting in Downing Street that ‘Muslimness’ was raised as an ‘issue,’ that my ‘Muslim women minister’ status was making colleagues uncomfortable and that there were concerns that I wasn’t loyal to the party as I didn’t do enough to defend the party against Islamophobia allegations.

“When I challenged whether this was in any way acceptable and made clear there was little I could do about my identity, I had to listen to a monologue on how hard it was to define when people are being racist and that the party doesn’t have a problem and I needed to do more to defend it.”