Shiji Lapite, 34, died of asphyxiation after being held in a neck-hold by plain-clothes police officers in north London in December 1994.
The decision by the Police Complaints Authority was condemned by Mr Lapite's family and campaigners who are to seek a judicial review into the decision earlier this year by the Crown Prosecution Service not to prosecute the officers. There was also criticism of the complaints procedure for allowing police officers to investigate themselves.
An inquest in January ruled that Mr Lapite was killed unlawfully after one constable admitted kicking him in the head. Mr Lapite was arrested on suspicion of possession of crack cocaine. The jury heard that one pathologist had counted 45 separate injuries on the body of the deceased, compared with "superficial" injuries sustained by the officers.
Mr Lapite later collapsed in a police van and was driven straight to hospital, where he was pronounced dead half-an-hour after being arrested.
A post-mortem examination revealed that Mr Lapite had been drinking and had also taken cocaine, which may have anaesthetised him and caused him to struggle more aggressively.
The PCA, which oversaw the inquiry, said no disciplinary action would be taken against the officers involved, although Molly Meacher, of the PCA, urged the Metropolitan Police to ensure that officers understood the risks of restraining neck-holds. The PCA has repeatedly stressed the danger of using neckholds, which have been responsible for a number of deaths. Scotland Yard has now agreed to carry out extra training.
Ms Meacher said the PCA had based its decision on advice from an independent barrister and testimony of two witnesses who said they saw no officer using "unreasonable force".
Mr Lapite's widow, Olamide, said: "I have lost my husband and my children have lost their father but the authorities have failed to bring to justice those responsible for the death."
Piara Power, of the Newham Monitoring Project, a pressure group, said: "How can the un- animous verdict of a jury and widespread public concern over the whole issue of deaths in custody be so contemptibly brush-ed aside in this way? This episode serves to bring the entire criminal justice system into disrepute."
Deborah Coles, co-director of Inquest, the support and advice group, said: "It makes a mockery of any idea that the PCA has any other function than protecting police officers from being brought to account."