![John Stewart and Jim Farquharson [Pics: Aberdeen City Council]](http://risioja.allalla.com/blogs/49188634stewartfarquharsonsplit3.jpg)
Jim Farquharson admitted calling John Stewart a "fascist" and a "fat git" but Mr Stewart claimed the term "faggot" had been used.
The incident happened after a heated council meeting in September last year.
A complaint was lodged with the Public Standards Commissioner for Scotland (PSCS). It has been ruled he was not in breach of his code of conduct.
Mr Farquharson categorically denied using the term at the time of the incident.
He told BBC Scotland: "I have never used such a word."
However, he added that he stood by his fascist comment.
Lib Dem Mr Stewart announced last month he was stepping down as council leader after the SNP became the biggest party on the authority.
The SNP's Callum McCaig was installed as the authority's new leader.
Conservative Mr Farquharson recently joined forces with Marie Boulton, who was the authority's sole independent councillor, calling themselves the Independent Alliance Group, alongside Alan Milne.
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