Prasad was interrogated after an accused of a sex racket blackmail case allegedly stayed in a room in the MLA hostel booked at his name.
After giving statement to the police, Prasad, a general secretary of KPCC, said he was confident that the truth would come out during the investigation.
Meanwhile, KPCC president V M Sudheeran ruled out any action against Prasad since there had been no prima facie evidence against him.
Taking a serious view of the incident, an all party meeting had yesterday decided to tighten norms for renting rooms for former legislators and also brought certain restrictions on room occupation.
An accused in what came to be known in local parlance as "blackmail sex scam", Jayachandran was a member of a Kochi- based gang that allegedly took videos of several persons, including politicians and high profile businessmen, after pushing them into a sex trap.
The gang used the clippings to extort huge sums of money from them.