Conservative Culture Secretary Maria Miller was clinging on to her job last night despite being ordered to pay back £5800 in mortgage expenses and make a humiliating apology to MPs.
Mrs Miller was cleared of breaking strict parliamentary rules by moving her parents into her taxpayer-funded second home.
But she faced heavy criticism from the cross-party Commons Standards Committee for failing to co-operate fully with its 15-month investigation.
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Last night Labour MPs denounced the findings as a whitewash and called for Mrs Miller, one of the few women in David Cameron's cabinet, to be sacked.
Downing Street insisted the Prime Minister was standing by her and that she had his "very strong and very warm support". Later Mr Cameron himself said: "Maria Miller is doing an excellent job as Culture Secretary and will continue to do that."
But John Mann, the Labour MP for Bassetlaw who made the original complaint, said the Tory MP had been "found to have acted in a way that is completely unacceptable for a minister".
He added that given DavidCameron's past statements on cleaning up MPs expenses the Prime Minister would be accused of "hypocrisy" if he did not sack Mrs Miller.
The committee report found she should have declared as her main family home her London property, where her parents also lived, because she was spending most nights there.
That meant that she should have claimed taxpayers funds instead on her other home, in her Basingstoke constituency.
But the decision was "finely balanced", it added, and the MP had acted "reasonably in the light of the guidance available at the time". The report made clear there was nothing in the rules preventing Mrs Miller from moving her parents into an expenses-funded home - as long as she reduced claims to take account of the situation.