The decision not to charge anyone for the death of Shiji Lapite, 34, who died in north London in December 1994, was immediately condemned as "incomprehensible" by the lawyer representing the dead man's family.
The CPS was forced to reconsidered its original decision not to prosecute any police officers following a court challenge. But in a statement the CPS said yesterday that there was still insufficient evidence.
In January 1996, an inquest ruled that Mr Lapite was killed unlawfully after one constable admitted kicking him in the head.
Mr Lapite was arrested in Stoke Newington on suspicion of being in possession of crack cocaine. After Mr Lapite was searched and no drugs were found he ran off. Officers caught up with him and a struggle began, with Mr Lapite being put in a neckhold.
Mr Lapite later collapsed in a police van and was driven straight to hospital, where he was pronounced dead from asphyxiation.
The inquest jury heard that one pathologist had counted 45 separate injuries on the dead man's body.
A statement by the CPS said yesterday: "After painstaking consideration the Chief Crown Prosecutor for Central Casework has decided there is insufficient evidence to prosecute any police officer in connection with the death of Mr Lapite.
"In the absence of evidence to show that the actions of the police officers, either singly or in concert, were a substantial cause of Mr Lapite's death, there is not a realistic prospect of conviction against any police officer for manslaughter." The statement also ruled out other charges relating to injuries sustained by Mr Lapite.
It added that five pathologists involved in the case were consulted again.
"None of them was able to state, without reservation, that compression of the neck was a substantial cause of Mr Lapite's death or that any other act of a police officer caused his death," the statement said.
But Raju Bhatt, the solicitor for Mr Lapite's family, argued: "There was no doubt in the jury's mind that this man had died as a result of an unlawful and dangerous neckhold.
"It's inconceivable that any fair examination could have come to any other conclusion than to prosecute."
It is thought that members of the Lapite family will ask for a judicial review of yesterday's decision. They could also attempt to privately prosecute the officers involved.
The Police Complaints Authority said it would now reconsider whether disciplinary action should be taken against any officers.
The case of Mr Lapite was one of three deaths in custody to be re-considered following a successful court challenges last July in which the CPS admitted making mistakes.
It led to the accusation that the Director of Public Prosecutions, Dame Barbara Mills, and her prosecutors were unwilling to take the police to court.
Following the reviews three Metropolitan Police officers were charged in February with the manslaughter of Richard O'Brien, 37, who died after being arrested in Walworth, south London, in April 1994.
At the same time, the CPS decided not to prosecute anyone over the treatment of John Treadaway, a robbery suspect who claimed he was tortured by West Midlands police officers.
An inquiry into the quality of decision-making by the CPS in such cases has been set up.