The French football coach, Laurent Blanc, has been cleared of wrongdoing in the row over secret quotas to limit the number of black and north African-origin players on the national team. But the French sports minister, Chantal Jouanno, said comments made in a meeting of football officials to discuss quotas was "borderline tending toward racist".

France has been plunged into a crisis over racism in sport after the website Mediapart revealed secret recordings showing Blanc and other officials had discussed introducing quotas to limit dual-nationality players at youth training academies.

The plan allegedly involved limiting non-white youngsters from entering the selection process through training centres as early as age 12 or 13. One suggestion was to set a cap of 30% on players of dual-nationality origin. In the transcripts, Blanc reportedly favoured the idea of quotas and made comments about "big, strong, powerful" black players. The transcript showed him favouring players with "our culture, our history". He reportedly cited world champions Spain as an example: "The Spanish, they say: 'We don't have a problem. We have no blacks.'"

Jouanno said: "It emerges very clearly that ways to limit the numbers of so-called dual-national players ... including putting in place quotas were, in fact, debated" at the November French Football Federation (FFF) meeting. The subject was raised in a manner both clumsy and clearly uncalled-for. The general impression that emerges is really very unpleasant, with innuendos that very often were borderline tending toward racist."

But the sports ministry's inquiry into the affair concluded Blanc was not guilty of racial discrimination. "No fact shows Laurent Blanc approves of discriminatory procedures," Jouanno said. She argued 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 north-African players], no fixed opinion."

She concluded no quota system for players was put in place so the law against racial discrimination had not been broken. The FFF also cleared Blanc but reproached him for taking part in a discussion that should never have happened.

"Laurent Blanc is angry with himself for what he said and can't believe he made [those comments]," said Patrick Braouezec, the head of FFF's separately-commissioned inquiry. The federation's council meets on Thursday to discuss the issue but it is unlikely Blanc will be punished.

Blanc was due to appear on the evening news to comment on being cleared. When the scandal broke, he first denied any knowledge of quotas, then after the publication of the transcript, apologised if certain terms he used caused offence.

The Les Bleus scandal has exposed a malaise over race and immigrant origins that persists in French society. In 1998, the multi-racial World Cup-winning team – in which Blanc played alongside black and north African-origin players – was hailed as the symbol of a new rainbow France. But despite the giant portrait of the player Zinedine Zidane projected on to the Arc de Triomphe after France won, the country has yet to come to terms with its diversity.

With ethnic minorities hugely under-represented in business, media and politics – only one of the 555 members of parliament from mainland France is non-white – football was seen as the true meritocracy, where skin-colour didn't matter. The presumed undertone of the leaked football officials' meeting – that black players were bulky and athletic while white players used their brains – left a bitter taste.

In a petition published by the daily Libération, several local club coaches said they were "nauseated by the disparaging of "blacks" and "Arabs" revealed in the tapes. The dual-nationality quota scandal also served to reinforce an undercurrent of feeling that non-white or Muslim players on the French team where somehow a threat or could easily betray the nation. The French team's mutiny at last summer's South Africa World Cup had privately been blamed on black and Muslim players' lack of a sense of "national identity".

Several leading black French footballers, including Liliam Thuram and Patrick Vieira, have expressed their disgust at the alleged quotas.

The scandal has weakened French football, which has lurched from crisis to crisis since losing the 2006 World Cup after Zidane's famous head butt. Humiliation in Euro 2008 was followed by a difficult qualification for the 2010 World Cup. The team's credibility has also suffered over a scandal about an underage prostitute who claimed to have dealings with several players.