Mr Duncan apologised for comments he made about MPs expenses
Conservative MP Alan Duncan did not break expenses rules in claiming for a mortgage on a property he owned outright, says a standards watchdog.
Mr Duncan bought a second home in his Rutland constituency by taking out a new mortgage on his London home.
Commissioner for Standards John Lyon found Mr Duncan had acted "reasonably and fully within the rules".
Mr Duncan was demoted in August for saying MPs have to "live on rations" in the wake of the wider expenses scandal.
Now shadow prisons minister, he was criticised during revelations about the way hundreds of MPs had made claims under their second homes allowance.
The Daily Telegraph reported he had only taken out a £271,000 mortgage on the Rutland house in 2004 - despite the fact he had owned it for more than a decade - and had since claimed more than £63,000 in interest payments.
The commissioner's report confirms Mr Duncan claimed second homes expenses for a £271,000 mortgage he raised against a London property he already owned.
But it says the loan was secured to buy a second property in his Rutland constituency, which he later designated his second home for expenses purposes.
Mr Duncan said he had regarded the London home "as more suitable than the Rutland property to be offered as collateral for the loan".
In 2004 he took out a £271,406 mortgage on his Rutland property and paid off the London one, something he said he had done "to try to set the highest possible standards of conduct" and had cost him "about £3,500" from his own pocket.
Mr Lyon said the claims had not been in breach of the rules and Mr Duncan "acted reasonably and fully within the rules of the House at the time".
In his conclusions the commissioner said the claims were "a legitimate call on his additional costs allowance".
Mr Duncan referred himself to the watchdog after the Telegraph story.
He wrote to Mr Lyon: "I enclose an article from yesterday's Daily Telegraph suggesting that I'm a mortgage flipper. I think it inevitable that you will soon receive a frivolous and malicious complaint, inspired I am sure by a national newspaper ... I would therefore like to beat them to it."
The Commons standards and privileges committee, which decides what action should be taken on Mr Lyon's investigations, emphasised it would only agree to self referrals by MPs in "exceptional circumstances".
"Investigations of this kind cost public money and can divert resources away from other work. We will not allow the commissioner's office to be used by members simply as a means of refuting unfounded allegations that appear in the press."
The commissioner has investigated a succession of MPs following the Daily Telegraph's expenses revelations in May.
Former home secretary Jacqui Smith and former minister Tony McNulty have both had to apologise to the Commons following his investigations.
The report also notes that the Labour MP John Mann had asked the commissioner to investigate Mr Duncan - but had not supplied any evidence that the rules had been breached or copied the Tory MP into his letter.
The report reminds MPs of the "basic courtesy" of sending copies of any complaints to the commissioner to the MP concerned.
Mr Duncan has argued he acted within the rules although he has apologised for gardening claims and repaid £4,000.
But he was secretly filmed saying MPs were being badly treated and forced to "live on rations" - comments described later by Tory leader David Cameron as a "bad mistake".
He lost his job as shadow leader of the House of Commons and apologised for the remarks.
If expenses reforms from a six-month inquiry are implemented, MPs will no longer be able to claim towards mortgage payments.