The Royal Malaysian Air Force had a chance to intercept MH370 when it was detected on the military radar off the Malacca Strait.
But they did not because the authorities "assumed" that the flight was ordered to turn back by the control tower.
Wrapping up the address for the Defence Ministry in Parliament on Wednesday, Malaysia's Deputy Defence Minister Abdul Rahim Bakri said the flight, which was not immediately identified as MH370 when it was last detected on the military radar at 2.40am, was identified as "non-hostile".
He said: "We felt the turn back was by a friendly aircraft and the directive had come from the control tower."
But he stressed that conclusive answers will be available only when plane debris is found, reported liberal news portal Malaysiakini.
Said Mr Abdul Rahim: "We noticed that the plane was heading towards the Malacca Strait or the Andaman Sea. So we informed the task force responsible (for investigations) the next day."
He also said that revealing the information to the public would have "involved national security".
But at a press conference later on Wednesday, Defence Minister Hishammuddin Hussein said he cannot confirm whether his deputy's answer in Parliament was correct.
Mr Abdul Rahim also dismissed criticism that delays in disclosing military radar data might have hampered the search for the missing jet, liberal news portal Malaysian Insider reported.
He said they had to corroborate the information with other agencies investigating the case, such as the Federal Aviation Administration, National Transportation Safety Board and the Air Accidents Investigation Branch.
He said: "We do not want to make any definitive answers until we are 100 per cent sure. Once we had the resolution that the turn back was indeed the missing aircraft, we immediately deployed assets to search for the plane."
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