Sky News did not break the television industry's code of practice by airing an interview with Blair Cottrell, the TV watchdog has ruled.

In August, former Northern Territory Chief Minister Adam Giles invited Cottrell onto the 24-hour news channel to talk about immigration. The United Patriots Front leader has previously called for a picture of Adolf Hitler to be hung in every Australian classroom.

After intense backlash – including from its own presenters – Sky suspended The Adam Giles Show and banned Cottrell from appearing on the network ever again. Fairfax Media later revealed that Sky News boss Greg Byrnes knew about the interview beforehand and gave the segment the green light.

The incident also led to the Victorian transport minister banishing Sky News bulletins from Melbourne's busiest train stations.

The Australian Communications and Media Authority has now handed down its findings into the controversial interview. The TV watchdog found Sky did not provoke "intense dislike" or "serious contempt" on the grounds of race or religion because Cottrell's comments about Islam were brief and he did not identify specific nationalities other than white South Africans.