Mr Bradley's actions did not breach the code, the report said
Liverpool City Council leader Warren Bradley has been cleared of bullying after an official investigation.
The Standards Board for England found the councillor had been "unwise" and "naive" in the fallout of the 2007 Mathew Street Festival cancellation.
But its ethical standards officer said Mr Bradley had not acted maliciously in his dealings with former culture company chief, Jason Harborow.
Mr Bradley told the BBC he was "very pleased" with the report.
It was alleged that Mr Bradley had broken ethical standards for council officers by bullying, failing to treat others with respect and bringing his office or authority into disrepute.
But the investigation, published on Thursday, found no evidence to support the allegations, and recommended no action be taken.
"I always said from the outset I hadn't breached any of the code of conduct placed on local authority members," said Mr Bradley.
"I'm pleased that after such a long and protracted investigation the Standards Board have come out and said exactly that.
"I've been under horrendous pressure over the last few months... it was reported as 'I'm guilty' despite an investigation under way.
"I'm moving on now, there is no further action, there has been absolutely no breach of code of conduct."
The report said that Mr Bradley sent an email to council chief executive Colin Hilton demanding Mr Harborow be relieved of his duties pending an inquiry into the festival cancellation.
Mr Bradley's actions were not "deliberately malicious or insulting", but were made in genuine concern at the sudden cancellation of the event, the ethical standards officer found.
Later in September 2007, the councillor held a heated meeting with Mr Harborow in which Mr Bradley blamed him for the cancellation.
However, the investigation found this did not amount to bullying.
The inquiry was initially opened in response to claims Mr Bradley met privately with an ex-council officer to discuss Mr Harborow's position.
But conflicting accounts of the meeting made it impossible for the ethical standards officer to decide exactly what was discussed, the report read.
"She was, therefore, not satisfied that Councillor Bradley failed to treat Jason Harborow with respect by conspiring against him at the meeting on 18 November," it read.
The report concluded: "The ethical standards officer has recognised the pressure Councillor Bradley was under to deliver such a high-profile event as Capital of Culture, and that the deterioration of his relationship with Jason Harborow was played out in the most public of arenas."
It said that for conduct to be disreputable to a member's authority there must be "an improper motive, unlawfulness, the hope of personal gain or gratuitously offensive behaviour".
"Based on the evidence the ethical standards officer saw, she did not consider this to be the case here," the report added.
The Standards Board for England promotes ethical behaviour in local authorities, investigating cases deemed inappropriate for authorities to deal with themselves.