A senior Birmingham politician who referred to asylum seekers as "scumbags" has been cleared of bringing the city council into disrepute.

Local government watchdog, the Standards Board for England, ruled that cabinet housing member John Lines had not broken a code of conduct which requires councillors to treat people with respect at all times when he gave an outspoken interview to a magazine.

Coun Lines (Con Bartley Green) told the Defence Management Journal it was wrong that asylum seekers were given preferential treatment when applying for council housing, while former members of the armed forces returning from Iraq had to go to the bottom of the queue.

He was quoted in the magazine as saying: "We do not afford them (Ghurkhas) citizenship. We pay them a pension to go back to Nepal.

"Yet some scallywag, some scumbag can jump on the back of a lorry, come over under the tunnel and never expect to work a day in his (expletive) life. And if he’s been here for a time waiting for a decision, we give him automatic British citizenship. The world’s gone (expletive) mad."

The Standards Board decided Coun Lines had a right to freedome of speech and a right to be abusive, as long as he stayed within the law.

Standards Board head of referrals Kathy Farrand said concerns about Coun Lines’ behaviour were acknowledged. However, she said the local government code of conduct was "never intended to prevent members from being free to be highly critical on issues of concern to them".

Ms Farrand added: "Members have a right to freedom of speech in a democratic society and can express their views, within the law, as forcibly as they see fit."

She said freedom of speech did extend to abuse and that previous cases considered by the board’s ajudication panel and by the High Court indicated that conduct would have to be "quite extreme" before a failure to comply with the code of conduct would be found.

No action will be taken against Coun Lines and the matter will not be referred to Birmingham City Council’s standards committee for further investigation.

A formal complaint to the Standards Board about Coun Lines’was submitted by former Labour city councillor Dennis Minnis.

Mr Minnis, who runs a project to assist refugees in Handsworth, described Coun Lines’ comments as "brutally offensive" and said they contrasted with assurances by Tory leader Daivd Cameron that his party had shifted away from right-wing beliefs about immigration.

Mr Minnis said: "This sort of thing will tarnish the reputation of Birmingham. The comments were acting against equalities, reinforced stereotypes and could damage community relations."

After the complaint to the Standards Board was submitted, Coun Lines apologised at a full council meeting for his remarks.

He said he had committed the "henious crime" of becoming emotional when being interviewed by the defence magazine and he now regretted having referred to asylum seekers as scumbags.

But he maintained his belief that it was wrong for asylum seekers to be given priority on the housing waiting list while soldiers returning home from Iraq as "heroes" had to wait in line with drug addicts for accommodation.