The teacher with more than 30 years' unblemished experience said she was given five minutes the next day to clear her things and told to return to her duties a month later. When she failed to do so she was sacked.
Mrs Flynn admitted raising her voice at the parent, who called her a "fat cow" but said she was trying to protect the staff member who suffered from ill-health.
But England's General Teaching Council cleared the 55-year-old of any unprofessional conduct.
Afterwards, Mrs Flynn said she was delighted at the outcome and said she is not considering legal action for unfair dismissal.
Mrs Flynn, who is now working as a supply teacher in north London, said:
"This has gone on for more than a year now and I want to put it behind me."
She was suspended from Shaftesbury primary in Newham, east London, after intervening in a row between a parent and the staff member in March 2001.
The GTCE hearing in Birmingham was told how she stepped in as a "good Samaritan" to ease the tension. Mrs Flynn said she did not return to the 600-pupil school because Stephanie Lachowycz, the headteacher, had made her position untenable.
She told Newham council she could not go back, but a disciplinary hearing was conducted in June and Mrs Flynn, who did not attend, was sacked.
Ms Lachowycz said she instigated the suspension as a "cooling off period" allowing her to conduct an investigation.
"Mrs Flynn behaved inappropriately, it made the situation worse," she told the GTCE. "She should never have got involved."
However, she added: "I do not doubt that Mrs Flynn acted with the best intentions but she should not have got involved."
Mrs Flynn had been a full-time teacher at the school for a year and had worked as a supply there before the incident.
She faced two charges of unprofessional conduct when she faced the GTCE - one for her involvement in the row, the other for not returning to work after her suspension. Neither was upheld.