Housing Secretary Robert Jenrick has said he regrets sitting next to Tory donor Richard Desmond at a fundraiser and sending him text messages.
Mr Jenrick has been under fire over his contacts with the tycoon, who donated money to the party after a new housing development was given the go-ahead.
The minister said he was right to back the 1,500 home scheme at the former Westferry print works in East London.
But he told the BBC there were “lessons to be learnt” from the episode.
Mr Desmond made a personal donation of £12,000 to the Conservative Party 12 days after the minister overruled government planning inspectors to approve the development.
Mr Jenrick, who has announced a major overhaul of the planning system in England, aimed at removing obstacles to new development, has always insisted he had no knowledge of the donation and had been motivated by a desire to see more homes built.
‘Cash for favours’
In January, Mr Jenrick overruled objections from officials, and pushed through approval for the Westferry project one day before community charges placed on developments to pay for local services – the Community Infrastructure Levy – were increased.
The timing allowed Mr Desmond to avoid paying £40m – but the decision was later challenged in court, and the minister conceded the timing of his decision was “unlawful by reason of apparent bias”. The case is now being handled by another minister.
Documents on the case were released in June after Labour claimed Mr Jenrick’s approval of the housing development raised suggestions of “cash for favours”.
It emerged that Mr Jenrick had sat next to Mr Desmond at a Tory fundraising dinner in November, and the former Daily Express owner had shown the minister a video of his plans for Westferry. The pair later exchanged text messages about the planning application.
Downing Street has said prime minister Boris Johnson considers the matter “closed”.
Asked on BBC Radio 4’s Today programme, what he had learned from the Westferry case, he said: “I’ve set out the events around that decision and there are definitely lessons to be learnt.
“I wish I hadn’t been sat next to a developer at an event and I regret sharing text messages with him afterwards.
“But I don’t regret the decision, because I think it was right to get housing built on a brownfield site on a part of London that desperately needs it.
“The system that I’ve helped to design that is set out in the proposals we’re publishing today will actually move us forward significantly on some of the challenges that that case rose.”
‘Developers pay more’
He added, “I don’t think this does give more power to developers, it creates a much more certain system. It will, for example, fix the challenge of developer contributions once and for all.”
Under the proposed new planning regime, the Community Infrastructure Levy will be replaced by a new national levy to fund projects such as schools and roads.
Asked how much money the Conservatives have received from property developers since Boris Jonson became prime minister, Mr Jenrick said: “Well I’ve no idea because ministers are not involved in those issues, that is entirely for the Conservative Party.”
The housing secretary added: “You’re entirely mischaracterising what we’re doing here. We’re actually asking developers to pay more.”
He said the new planning proposals would “abolish the current system which favours the big developers”.