An extraordinary council of the French football federation (FFF) will now meet on Thursday but it looks highly unlikely the coach will face any action following the ministry findings.
Blanc attended a meeting in November at which members of the federation discussed the idea of enforcing limits on black and Arab players in youth academies.
The meeting was originally meant to discuss the large number of players in France with dual nationality who eventually choose to play for their country of origin.
"There is nothing leading to say that Laurent Blanc is backing discriminatory practices," Sports Minister Chantal Jouanno told a news conference as she discussed the findings of a twin inquiry into the row.
"Laurent Blanc was attending this kind of meeting for the very first time. He did not have any project (to limit the number of black and Arab players), no fixed opinion."
Later on Tuesday, Patrick Braouezec, who led the FFF's own investigation, said Blanc was "angry at himself."
According to Braouezec, the former France player "cannot conceive today that he said what he said, and that he let things get on top of him."
Federation technical director Francois Blaquart, suspended pending the twin inquiries, used the word 'quotas' in the November meeting but Blanc has said he also made comments which could "offend some sensibilities."
"VERY SERIOUS"
However, the federation probe came to a similar conclusion to the ministry investigation.
"There is no evidence that a policy of quotas has been enforced," said Braouezec, who added that the verbatim quotes of the November meeting published by investigative website Mediapart last month were almost identical to the recording they received.
Mediapart on Tuesday published part of the recording in which Blanc says he is "in favour" of quotas.
As the remarks made during the meeting were "serious, very serious", the investigators would recommend to the FFF that "any debate on nationality in sports should be abandoned".
Blanc's side of the story will be heard during the French TV channel TF1's evening news programme on Friday.
Minister Jouanno added that her investigation did not find enough evidence to launch a judicial procedure although she reiterated that racial quota enforcement was illegal in France.
"There is no element, no accumulation of evidence that leads us to believe there was discrimination," she said. "There are not enough grounds to refer it to the prosecutor's office."
Jouanno said she did not have the authority to sanction Blaquart, but would ask the FFF to launch an audit into his responsibilities.
Blanc has been slammed by former team-mates from the country's multicultural 1998 World Cup-winning side but others such as then captain Didier Deschamps and influential France great Zinedine Zidane have backed the coach to stay on.
Race and immigrat
