Malky Mackay is "very concerned about seriously inaccurate and misleading reports" in the media and has said he will fully co-operate with any Football Association investigation, though the League Managers' Association also said text messages sent during Mackay's employment at Cardiff were "regrettable."
The LMA put out a statement on behalf of Mackay after the Football Association confirmed it was investigating a dossier sent by Cardiff reporting sexist, racist and anti-gay comments by the former Bluebirds manager and head of recruitment, Iain Moody.
The Daily Mail published examples of the explicit text messages, though it was unclear who precisely is responsible for many of the messages.
In the LMA statement, Mackay accepted responsibility for two of the messages, but offered an excuse that "he was letting off steam to a friend."
"In the course of a search by the Club in early 2014 of 10,000 private text messages sent to and from another member of staff during Mr Mackay's employment at Cardiff, in relation to other matters, it emerged that Malky had, it seems, sent a couple of one line texts that were, with the benefit of hindsight, very regrettable and disrespectful of other cultures," the LMA's statement said.
"These were two text messages sent in private at a time Malky felt under great pressure and when he was letting off steam to a friend during some friendly text message banter. That said, Malky believes he could and should have conducted himself better on these two isolated occasions. The precise details need to remain private for the time being until any FA process is complete."
However, the statement also noted "seriously inaccurate and misleading reports of his alleged involvement in these matters in the media."
"It has never been alleged that he wrote any homophobic or sexist messages and he has confirmed that he did not do so," the statement continued. "Further, there are incorrect and damaging suggestions that he sent a whole host of offensive and unpleasant messages that are simply not true and which give a grossly distorted and unfair view of Malky's involvement in this matter."
Also on Thursday, Mackay's agent Raymond Sparkes told Sky Sports News that he was "shocked and stunned" by the reports and that his client will fight the allegations.
Cardiff suspended Moody in November 2013 and sacked Mackay in December. The Welsh club declined to make any public comment on the dossier, saying it is a now a legal matter in the hands of the FA.
Mackay is now understood to be out of the running for the vacant manager's job at Palace after the club ended their pursuit of the former Watford boss.
The dossier was filed more than a week ago, according to Press Association, and was not deliberately timed to affect Mackay's candidacy at Selhurst Park, though Mackay questioned the timing in the LMA's statement.
"Malky finds it strange that these matters were only raised with the FA and in the media now, 8 months after his employment ended and the day before he was reported as being offered the opportunity to become manager of Crystal Palace FC," the statement said.
Moody resigned from his post as sporting director at Palace on Thursday, when just 24 hours ago it seemed the pair would be reunited in South London.
Palace must now turn to other targets to succeed Tony Pulis, with sources saying former England manager Glenn Hoddle ruled himself out of a switch from QPR.
Former Tottenham boss Tim Sherwood has also reportedly distanced himself from the role, after initially being deemed a finalist for the job, while PA Sport reported former Norwich and Newcastle boss Chris Hughton has expressed an interest.
Caretaker manager Keith Millen is now expected to take charge of Saturday's home Premier League clash with West Ham.
The Gay Football Supporters' Network (GFSN) admitted shock at the reports of Mackay's alleged anti-gay comments.
"The GFSN is saddened to hear reports of alleged homophobic comments by Malky Mackay," said spokesman Simon Smith. "Homophobia is still a problem in football and we expect a high standard of conduct from managers, who should be setting a positive example of inclusion. We will be following the story closely and asking the FA to fully investigate the allegations."
Kick It Out chairman Lord Herman Ouseley urged the FA not to hold back with any sanctions should the allegations against Mackay and Moody be proven.
"Kick It Out is aware but not shocked to hear of reports revealing alleged racist, anti-Semitic, sexist and homophobic comments made by former Cardiff City manager Malky Mackay, and Iain Moody, the current sporting director at Crystal Palace," said Lord Ouseley. "The governing bodies and the clubs must denounce such attitudes prevalent in the game, and take the appropriate action.
"If these types of exchanges made privately make it into the public eye, the individuals concerned must accept the full consequences of their actions. Kick It Out now awaits the outcome of The Football Association's investigation.
"These revelations are further confirmation of how football is tainted with racism, sexism, homophobia and anti-Semitism, and the culture which continues to exist throughout the game and in wider society as a whole. The reality is that these views are most dangerously held by those people in positions of power, and the football establishment knows and condones it.
"This familiar scenario acts as a challenge to the leadership of football that cannot be shirked again."