The Crown Prosecution Service is understood to have withdrawn its evidence after becoming concerned at the quality of information provided by private security guards.
The Home Office said it was too early to say whether ministers would order an inquiry into Group 4's handling of the case.
Nine West African men were arrested after a riot at Campsfield House detention centre, near Oxford, last August. They were on trial for 13 days at Oxford Crown Court and had faced sentences of up to 10 years for riot and violent disorder.
Nicholas Jarman, speaking for the prosecution, told the court yesterday that the case was essentially based on evidence from security officers on duty during the incident and that "no prosecution properly conducted could or should invite a jury to convict on the basis of this evidence".
The jury had heard that Group 4 staff were attacked with dumbbells, a kitchen was wrecked, a shop looted, and the library set ablaze. It took Group 4 riot squads with shields and batons and police officers with dogs to restore order.
Much of the evidence was recorded on security cameras, but during the trial Group 4 officers repeatedly contradicted themselves or said they could have been mistaken. They got the names of defendants and other detainees confused.
Seven of the defendants are claiming asylum as environmental protesters or political opponents of the Nigerian or Ghanaian governments.
One of the nine has twice tried to commit suicide. Following the trial's collapse four were freed, having been given permission to remain in Britain. The other five will be taken back into detention while their cases are examined.
One of the defendants, Nigerian Sunny Ozidede, 30, said: "Justice has been done." He said he was not surprised the case had collapsed.Reuse content