Former minister Denis MacShane could not be prosecuted because House of Commons rules prevented his letters being used against him, it has emerged.
Mr MacShane, the MP for Rotherham, quit on Friday after it was revealed he had wrongfully claimed £7,500 in expenses.
A Parliamentary committee found he had submitted 19 false invoices which were "plainly intended to deceive".
But letters in which he admitted expense abuses are not legally admissible.
The former Labour minister for Europe was facing a 12 month suspension from the House but resigned on Friday, triggering a by-election.
Mr MacShane, who has has repaid the money, pointed out he had not gained personally, but wanted to take "responsibility for my mistakes".
- MP for Rotherham since 1994 by-election
- Minister for Europe from 2002 to 2005
- Chaired Commons inquiry into anti-Semitism in 2006
- Born in Glasgow as Denis Matyjaszek, to Irish mother and Polish father
- Changed his name when he worked at BBC as reporter and newsreader from 1969 to 1977
- Sacked by BBC for using fake name to call radio phone-in
- Twice married with four children
- Former partner of ITN broadcaster Carol Barnes
- The couple's daughter Clare died in 2004 in a skydiving accident
He said: "I have been overwhelmed by messages of support for my work as an MP on a range of issues but I accept that my parliamentary career is over.
"I appreciate the committee's ruling that I made no personal gain and I regret my foolishness in the manner I chose to be reimbursed for work including working as the prime minister's personal envoy in Europe."
Parliamentary Standards Commissioner John Lyon found the MP had entered 19 "misleading" expenses claims for research and translation services from a body called the European Policy Institute (EPI).
The EPI was in fact a "loose network", with no office, no salaried staff and with a bank account controlled by Mr MacShane himself and the signature on the invoices purporting to be from the institute' s general manager was, in fact, from Mr MacShane.
Dropped investigationThe Metropolitan Police dropped its investigation into Mr MacShane in July after receiving advice from the Crown Prosecution Service.
It has now emerged that a prosecution could not rely on Mr MacShane's letters to Mr Lyon, in which he reportedly admitted the deception.
Clerk of the Journals, Liam Laurence Smyth, who is responsible for parliamentary privilege issues, said the correspondence was protected by parliamentary privilege which, he said, was essential for parliament to function effectively.
Mr MacShane, who has been MP for Rotherham since 1994, has accused the British National Party of running a "three-year campaign to destroy my political career".
Conservative MP Philip Davies has written to the Metropolitan Police, asking them to reopen it in light of Mr Lyon's report - which he said contained new evidence.
The Met said: "We are aware of the report and will be assessing its content in due course."
Mr MacShane, a former BBC journalist and past president of the National Union of Journalists, was also criticised for "excessive" claims for computer equipment, which MPs are allowed to claim for to support their parliamentary work.
In one instance the commissioner found he had allowed an intern to take a publicly-funded laptop away at the end of their internship, and bought a new one for his next intern. He also claimed for the same computer twice.
In a statement, Mr MacShane said: "I want to thank the people of Rotherham for allowing me to serve as their MP and the Labour Party for allowing me over the years to fight for the causes I believe in.
"I love the House of Commons and I hope by resigning I can serve by showing that MPs must take responsibility for their mistakes and accept the consequences of being in breach of the House rules."
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