Clifford Norris, 20, was due to be retried for allegedly assaulting Gatri Hassan, 26, an Asian taxi driver, in south-east London last November. Mr Hassan claimed Mr Norris attacked him with a knife after he complained about his driving.
In May a jury found Mr Norris not guilty of possessing an offensive weapon but could not reach a verdict on whether he had unlawfully wounded Mr Hassan, who needed hospital treatment.
Judge Brian Pryor QC, sitting at Woolwich Crown Court yesterday, told Mr Norris that he was free to leave after deciding that it might be "unfair" for him to face another trial on the charge.
Mr Norris, from Chislehurst, south-east London, is the brother of David Norris, one of the five men who have been named as key suspects in the inquiry into the stabbing to death of the black teenager at a bus stop in Eltham, south-east London, in 1993. One daily newspaper went as far as describing the five men as "murderers" and challenged them to sue.
At his original trial Mr Norris said his brother David, 22, had borrowed his car on the night in question and that he had been with a girlfriend at the time of the attack.
Judge Pryor highlighted the publicity that surrounded the case because of Mr Norris's family. Not only was his brother a suspect in the Lawrence case but his father, also called Clifford, was serving a jail sentence for drug offences at the time of the last trial.
"This notoriety could have a contaminating and prejudicial effect on the defendant's case," he said.
The judge also said that although the victim had picked out Mr Norris from an identity parade a few days after the attack, having studied pictures of David and Clifford he could see a family likeness that could give rise to an "honest" error with identification on the part of Mr Hassan.
There was also a danger that a jury might be prejudiced by the relationship between Clifford and David because of pre-trial publicity.
Mr Norris smiled when the ruling was made yesterday. He said after the case: "I was innocent and the verdict is right. Justice always prevails."
During the original trial the jury was told that Mr Hassan had confronted the driver of a Peugeot car to complain about his driving.
When Mr Hassan got out of his car he claimed he saw the driver of the other car brandishing a knife with a six-inch blade and shouting at him. He was hit twice by the other driver but could not say whether a knife had been used.