Gordon Brown's apology meant "no further action was needed"
Gordon Brown inadvertently broke Commons rules by sub-letting his constituency office, the Standards and Privileges committee has ruled.
The MPs said the prime minister had made no financial gain from the arrangement and they believed there was "no intention to deceive".
But they said Mr Brown should have ensured he had consulted the Commons authorities to check the rules.
They said Mr Brown had apologised and "no further action was necessary".
The complaint about Mr Brown sub-letting part of the Kirkcaldy and Cowdenbeath constituency office he shared with MSP Marilyn Livingstone to local Labour Party came from Conservative MP Greg Hands.
Mr Hands said he accepted the apology.
"It does not appear that the prime minister has personally profited from the breach, and he did quickly rectify the situation when it was brought to his attention by my complaint and by the media," he said.
The committee said Mr Brown and Ms Livingstone had paid half the rent for the office and each received half the income from the sub-tenant.
Mr Brown had reduced the amount he claimed from Parliamentary allowances to take account of the income he received from sub-letting part of the property to the local Labour Party.
"There was thus no financial gain to Mr Brown, and there was no subsidy of the local Labour Party from parliamentary funds," the report says.
Commons rules have explicitly banned subletting of premises paid for on expenses since 2004 - when former Scottish First Minister Henry McCleish was forced to quit over a similar scandal.
The committee says that "when entering into the arrangement to share a constituency office with a Member of the Scottish Parliament and to sub-let part of it to his local party, Mr Brown should have ensured that the House of Commons authorities were consulted on the rules relating to Members' allowances".
The arrangement broke no rules for Ms Livingstone - who handled the arrangement - but the committee said the premier had acted "dangerously" by assuming that Commons rules were the same as those for the Scottish parliament.
They also say the prime minister and the Commons authorities could have handled the complaint and their responses to it more promptly.
The committee also tick off the "House authorities" saying it was "disappointing" they had not "picked up from the papers available to them that an impermissible sub-letting arrangement had been entered into".
They were also criticised for giving the MP bad advice when he consulted them about the arrangement. It was stopped in December 2007 when the breach emerged in the media.
And they restate their advice that the case should serve "as a reminder 'particularly to ministers and to front-benchers' of the need to ensure they have complied with the rules of the House".
A spokesman for Mr Brown said: "We accept the findings of the report which makes clear that the error was inadvertent, there was no intention to deceive, it brought no financial benefit to Mr Brown or the Labour Party, and was quickly rectified once identified."