A French court has fined Interior Minister Brice Hortefeux for making racist comments about a young party activist of Algerian origin.
The court fined Mr Hortefeux 750 euros (£622) and ordered that he pay 2,000 euros to an anti-racism group.
Mr Hortefeux was recorded saying: "We always need one. It's when there are lots of them that there are problems."
He has said he was talking about the number of photos being taken, rather than people of Arab origin.
A lawyer for Mr Hortefeux said he would appeal against he ruling.
The comments were made in September and were broadcast in a video clip that circulated on the internet.
'Our little Arab'
Mr Hortefeux was joking with a small group of activists from the ruling UMP party in south-west France.
Immediately before Mr Hortefeux's controversial remark, one activist is heard saying: "Amin is a Catholic. He eats pork and drinks alcohol."
Mr Hortefeux then says: "Ah, well that won't do at all. He doesn't match the prototype."
A woman is then heard to say: "He is one of us... he is our little Arab."
The interior minister then says: "We always need one. It's when there are lots of them that there are problems."
The court ruled that his remark was "incontestably offensive, if not contemptuous".
The court did not issue a criminal conviction, judging that Mr Hortefeux had not intended the comments to be heard in public.
It found him guilty instead of the lesser offence of racial insult, AFP news agency reported.
At the time the video emerged, the opposition Socialist Party called for his resignation, saying the comment was "shameful and unspeakable".
Mr Hortefeux is a friend and longstanding ally of President Nicolas Sarkozy.
Mr Hortefeux is known for a tough approach on immigration, and served as immigration minister from 2007-2009.
The activist himself defended the minister in an interview with the newspaper Le Monde.