Johnson wowed the judges in his first audition
An episode of the X Factor in which Dannii Minogue made reference to a contestant's sexuality has been found not in breach of broadcasting rules.
Minogue suggested Danyl Johnson did not need to change the gender reference in a song he performed which was written for a female vocalist.
Media watchdog Ofcom received nearly 4,000 complaints about Minogue's words.
Ofcom said it "did not discern a pejorative or homophobic intent behind her comment".
The majority of the complainants felt that Minogue, a judge on the TV talent show, had made malicious and homophobic remarks based on newspaper reports about Johnson's sexuality.
Ofcom ruled it was "not outside the established nature of the programme for an X Factor judge to make such a comment... especially in circumstances where the performer had placed information about his sexuality in the public domain."
"If we're to believe everything we read in the papers, maybe you didn't need to change the gender reference in it?" Minogue said, after Johnson sang And I'm Telling You I'm Not Going from the musical Dreamgirls.
Johnson's mentor on the show, Simon Cowell, took exception to Minogue's comments and said she was playing "games."
Minogue joined the show in 2007
Johnson had previously been interviewed by two national newspapers regarding his sexuality.
But Ofcom warned broadcasters to tread carefully over such issues.
"Broadcasters need to exercise caution in this area, when the subject of sexual orientation may foreseeably arise in the context of a live programme," it said in a statement.
"In no way should 'outing' of participants in television programmes be encouraged, condoned or legitimised."
Minogue apologised on a later show, saying her comments were "only said with humour", adding that the pair had joked about it in rehearsals.
On her blog, she said it was "an openly bisexual guy singing a song that is lyrically a 'girls' song'"
Johnson said in a statement that he was not offended.