Science Secretary Michelle Donelan has apologised for publicly demanding a probe into an Edinburgh academic.
The Tory minister told peers her mistake was not accusing the Heriot-Watt professor of supporting Hamas in secret.
Taxpayers coughed up £15,000 to cover the damages paid to Professor Kate Sang for the frontbencher’s claim.
Opposition parties have called for Ms Donelan to pay the bill for the damages and legal costs herself.
The University and College Union (UCU) has described her position as "untenable".
READ MORE: Cherry says Donelan should quit after academic awarded damages
Prof Sang, launched a libel action against Ms Donelan after the minister tweeted a letter she had written in October to UK Research and Innovation (UKRI) - a public body which manages the government's research funding.
In the letter, Ms Donelan accused the professor of sharing "extremist views" and expressing sympathy for Hamas after its 7 October attacks in Israel.
This followed a tweet by Prof Sang sharing a link to an article in the Guardian with the headline, "Suella Braverman urges police to crack down on Hamas support in UK."
The academic wrote: "This is disturbing."
However, Prof Sang was referring to the article which detailed people in the UK appearing to celebrate the October attacks in which Hamas launched a surprise attack, killing over 1,100 and seizing around 240 hostages.
As a result of Ms Donelan's claims, UKRI launched an investigation into Prof Sang, who sits on one of their advisory groups on equality, diversity and inclusion.
That probe uncovered no evidence that she had expressed extremist views or support for Hamas or breached the terms of her appointment.
Last week, Ms Donelan accepted that Prof Sang’s comments referred to the story rather than just the headline.
READ MORE: Minister pays damages to academic she accused of Hamas sympathy
The science secretary was appearing before House of Lords Science and Technology Committee on Tuesday when she was asked about the accusation.
Ms Donelan told peers: “At the time, I was very concerned that the that there was a process failing in the appointment of members to the EDI board.
“And I worked with officials in my department and lawyers across my department over the course of two days to draft, to clear, and to send an official letter to UKRI CEO to ask for an investigation.
“This was highlighted using the same medium that was originally used, ie X often known as Twitter.
“On receipt of the letter, the UKRI CEO said that they were deeply concerned and confirmed that they would conduct an investigation.
"My intentions were and always are to do the right thing. The individual has subsequently clarified that her tweet was meant in relation to the entire article and not just the headline that was quoted within the tweet.
"Following this clarification, last week, I publicly withdrew all of my concerns, and, without admitting liability, £15,000 was paid to settle the case and save any costs associated with a protracted legal dispute, which would have been significant even if of course the department had won that case.
“The legal expenditure was approved by the department's accounting officer.
“While I always err on the side of transparency, I am now clear that in this case, I could have sent the letter in confidence to the UKRI in order for them to undertake the investigations privately.
"And I do apologise for not having done so and for any distraction that this decision has caused from this government's positive agenda.”
Ms Donelan said she accepted there was “no evidence” Prof Sang supported Hamas.
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