Terming as 'unfortunate' the naming of three Malayalam dailies in the report, Chandy said neither the newspapers nor their journalists worked against the interest of the state.
"They have also not done anything wrong," he told reporters after a cabinet meeting which considered the probe report of the Chief Secretary E K Bharat Bhushan into the report submitted by police.
Chandy had ordered an inquiry on the basis of a joint letter given to him by Malayala Manorama Managing Editor Philip Mathew, Mathrubhumi Managing Editor P V Chandran and Kerala Kaumudi Managing Director M S Ravi last week.
The issue pertained to references in the report submitted by intelligence wing of the state police to the government which claimed that a Tamil Nadu official camping in Kerala capital had been securing vital information regarding the state's position on inter-state water issues.
In their joint letter, the editors wanted the government to probe how such defaming allegations against their dailies had crept into the intelligence report.