Former federal Liberal candidate Michael Towke has been cleared of branch-stacking allegations.
But Mr Towke has pulled out of the battle for Liberal preselection for the federal seat of Cook, in NSW, held by retiring Liberal MP Bruce Baird.
Mr Towke was preselected last month but was dumped by the state executive on August 3 amid claims he had paid for at least 13 party memberships and had misled the party about details on his resume.
The state executive has now cleared Mr Towke and said no disciplinary action should be taken against him.
"It should be clear that the party's candidate review process found Mr Towke to be a fit and proper person pursuant to the provisions of its constitution," the party said in a statement.
"The NSW state executive has today affirmed that decision."
However, Mr Towke no longer wished to pursue his candidacy in Cook, the statement said.
"The party fully understands the difficult time experienced by Mr Towke, his family and supporters from this unwarranted, unnecessary and often inflammatory public attack on his character," it said.
The preselection process will now be reconvened.
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