Images of Hari Prasad Parajuli, trying to catch and hug women during Tuesday's celebrations marking the beginning of the annual rice planting season went viral on social media soon after the incident, sparking accusations of sexual harassment.
The images prompted huge criticism from media, lawmakers and leaders from his own party CPN-UML.
Spokesperson of CPN-UML said: "the pictures and videos showed that his behaviour were indecent, he should not have behaved like that as a minister.
However, one of the women who appeared trying to escape from the embrace of Parajuli in the 'disgraceful' pictures has denied the allegations.
Seventy-year-old Sanu K C organised a press conference and slammed media and women-rights activists for blowing the incident out of proportion.
She said the incident was spontaneous and the minister was only receiving blessings from her.
"He did not misbehave with me in any manner whatsoever but journalists took such pictures to create unnecessary hype," she said.
