French national football coach Laurent Blanc has been cleared by the country's sports minister of race discrimination.
Chantal Jouanno said there was no evidence that Blanc had broken any laws, by discussing putting a quota on the number of black and Arab players representing French youth teams.
Blanc has said his comments were taken out of context.
He and others had been discussing how to prevent French-trained players deciding to play for other countries.
Ms Jouanno said the future of the national technical director, Francois Blaquart, who was suspended after the revelations, would be decided by the French Football Federation (FFF).
It is due to release its own findings later in the day.
The affair has plunged the French Football Federation (FFF) into controversy less than a year after Laurent Blanc was brought in to sort out the national team, after its embarrassing performance at last year's World Cup.
Investigative website Mediapart claimed that Blaquart proposed secretly limiting the proportion of black and north African players to 30% at certain regional youth training centres, including the renowned Clairefontaine facility.
Blanc is alleged to have agreed with the plan in order to promote players with "our culture, our history".
The pair, along with under-21 coach Erick Mombaerts and under-20 coach Francis Smerecki, had been holding a debate over young players with dual nationality being trained in the French national system but later deciding to play for other countries.
However, "there is nothing leading to say that Laurent Blanc is backing discriminatory practices", Ms Jouanno told a news conference on Tuesday.
"Laurent Blanc was attending this kind of meeting for the very first time. He did not have any project, no fixed opinion."
"There is nothing to suggest that Laurent Blanc condones discriminatory guidelines."
She said the coaches' discussion last November was "clumsy and clearly uncalled for".
But the quotas idea was only discussed and never implemented, and so there was no reason to start legal proceedings.