A Tory MP who exposed himself to a woman in a pub in 2007 "is a young man and was even younger then", minister Kit Malthouse said when pressed on the incident.
Mr Malthouse, minister of state for crime, policing and the fire service, was quizzed over vetting procedures for candidates this morning.
Confronted with Mr Grundy's specific case, he said: "He's a young man and he was even younger then - and who knows what the circumstances were."
The exact date of the video has not been confirmed. However, Mr Grundy is believed to be around 40 now so will have been in his mid to late 20s at the time.
Presented with an image of the incident involving Mr Grundy, he told Sky he was of the understanding that the incident took place more than 10 years ago "probably before he [Mr Grundy] was even contemplating becoming a member of Parliament".
He said: "He's apologised for any offence.
"I think he's recognised his behaviour was inappropriate."
Speaking more generally on the issue of vetting candidates, he said: "I'm sure there are lots of things people have done as teenagers that they might not have contemplated may surface if they decide in future they'd like to be an MP.
"I think if we get into a position where people who many years before they even think about becoming an MP have to answer for their high jinx or frivolous or inappropriate behaviour that we might weed out quite a lot of people."
In the video, obtained by LBC, he stands in front of the camera at shoulder height and lowers his trousers, before the voice of a woman can be heard in the background, telling him to lift up his shirt to reveal his genitals.
The incident is said to have taken place at the Rams Head Inn, in Lowton, which is within his constituency.
Mr Grundy became a councillor in 2008. He became the first Tory to represent Leigh in the December election.
All those involved in the event in 2007 are understood to have been over the age of 18 at the time