Mr Pitt's lengthy explanation,tabled about 4.30pm,followed complaints by Mr Katter about the manner in which extra staff were being cut from his office.
The extraordinary saga began over calls for the Queensland branch of the party to denounce a speech made by KAP senator Fraser Anning,who used the Nazi-associated phrase"final solution"while criticising Muslim immigration.
Ms Palaszczuk said she wanted the KAP to publicly condemn Mr Anning's comments and said she would be reviewing the party's arrangement for extra staff,which had beengranted in 2015 during negotiations with the Palaszczuk administration to form government.
The Queensland KAP members refused and Ms Palaszczuk later announced she wouldrip up the staffing deal.
Last month,the Crime and Corruption Commission said thestate government had the right to allocate and withdraw staffing resources,but chair Alan MacSporran said an independent body should be created to objectively address resources.
Mr MacSporran also said,based on the information available,Ms Palaszczuk's comments – if proven – could involve an offence of bribery of a member of Parliament.
But the CCC did not believe the offence was intended to apply to statements made openly in Parliament,there was no chance of a successful prosecution and the matter should be dealt with by the Parliament.
In his ruling,Mr Pitt said there was no prima facie attempt to influence a member by a bribe.
"I am not,therefore,referring consideration of the alleged contempt relating to bribery to the ethics committee,"he said.
Mr Katter's complaint to Mr Pitt alleged the Premier's comments in Parliament,correspondence and statements in the media were contempt as they constituted"threats,menaces,intimidation or molestation of the KAP members"or that withdrawing staff constituted disadvantaging KAP members on account of their failure to condemn Senator Anning's speech.
"The Premier's response argues her conduct did not amount to threats,intimidation,molestation or compulsion by menace and was a normal part of the political process,"Mr Pitt wrote in his ruling.
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Immediately after the CCC's findings,Ms Palaszczuk said people made comments in the"heat of question time".
"That's the argy-bargy of Parliament,"she said.
LNP leader Deb Frecklington said the Premier's referral to the ethics committee was a serious issue and called into question her judgement.
"The Premier must now accept the consequences of her actions,"she said.
Last month,Mr Katter called forMs Palaszczuk to stand aside during an investigation.
The Parliament's ethics committee - which has equal numbers of government and opposition members - has significant powers to punish members found guilty of contempt,including fines and imprisonment.
Parliamentary rules mean MPs will not be able to discuss the matter during next week's sittings.