A Parliamentary watchdog today called for Tony Blair to give up some responsibility for regulating his Government's behaviour after concluding John Prescott had broken the rules.
A probe by the Standards and Privileges Committee found that Mr Prescott failed in his duty as an MP by not immediately declaring his stay at the ranch of a United States billionaire bidding to open a super-casino at the Millennium Dome in London.
It also said the Deputy Prime Minister had effectively admitted to breaking the Ministerial Code after accepting hospitality that "might reasonably have been thought likely" to influence his actions.
But Downing Street - which is solely responsible for policing ministerial rules - insisted it still had no intention of launching an investigation, and now treated the matter as "resolved".
Mr Blair's official spokesman said: "In terms of the problem, the problem has been resolved because the Deputy Prime Minister has now registered both the stay and the gifts and he has set about improving the procedure for registering gifts in his department."
A spokeswoman for Mr Prescott said that while he "fully accepted" the report's findings, he still believed there was "no case to answer" about a breach of the Ministerial Code.
In its report, the committee calls for "independent element" to be introduced into investigating alleged breaches of ministerial rules.
"It is in our view difficult for the public to understand the distinction between the Parliamentary and Ministerial Code, and who is responsible for the enforcement of each."
It adds that the current situation made for "difficulties in investigating complaints, such as this one, which raises issues under both jurisdictions".
The committee released its findings after considering a report by the Parliamentary Commissioner for Standards, Sir Philip Mawer, at a 90-minute meeting yesterday.
It found Mr Prescott "acted correctly" in registering last July's visit to Philip Anshutz's Colorado ranch, "albeit some eleven months late" and after a complaint had been made by shadow culture secretary Hugo Swire.
He had also not been obliged to put a cowboy suit and other gifts worth around £600 in the Register of Members' Interests because they were received in his ministerial capacity.
The committee ruled that in light of the fact that Mr Prescott had " eventually" declared the two-day stay, and "fully accepted" Sir Philip's conclusions, he should not face any further sanction.
"This case is nonetheless a cautionary tale to Ministers, and highlights the need for them to think very carefully about the implications of accepting hospitality from those with whom they have an ongoing relationship in their ministerial capacity," the committee added.
Mr Prescott said: "I have registered the stay at the ranch. The gifts, which were recorded (within ODPM) at the time, will be notified in the annual return to Parliament next week, as is the usual practice."
He said he also accepted concerns raised by Sir Philip about procedures within ODPM for reporting ministerial gifts.
"I have asked my department to undertake an urgent review of its procedures, and indeed we have already begun to implement new procedures."
The committee said the Deputy Prime Minister - who insists he has not been involved in planning decisions over casinos - had taken the view that " accepting Mr Anschutz's hospitality would not place him under any obligation".
"However, what Mr Prescott failed to do at that time was also to address, as the Ministerial Code requires, whether the proposed hospitality was from a source which might reasonably be thought likely to influence ministerial action."
Mr Swire said it was "clear" that both Mr Prescott and the committee believed he had breached the Ministerial Code.
"According to the report, even Mr Prescott now accepts that there was a perceived conflict of interest.
"The Prime Minister cannot ignore the now overwhelming view that, by staying at the ranch and accepting the gifts, Mr Prescott breached the Code."
He added: "It is simply untenable for Mr Blair not to launch an immediate investigation into the clear conflict of interest that has arisen.
"If he fails to do so, then any remaining shred of integrity that his Government has will be in tatters.
"There is no way that Mr Prescott should be left to run the country with this damning indictment hanging over him."Reuse content