An MI5 officer will not be prosecuted over claims he was complicit in the torture of former Guantanamo Bay detainee Binyam Mohamed.
Scotland Yard launched an inquiry after Mr Mohamed said an employee of the Security Service was aware of his ill-treatment while he was being held in Pakistan in 2002.
But director of public prosecutions Keir Starmer said there was "insufficient evidence" to prosecute the man, known as witness B, for any offence.
In a statement Mr Starmer said: "The Crown Prosecution Service has advised the Metropolitan Police that there is insufficient evidence to prosecute witness B for any criminal offence arising from the interview of Binyam Mohamed in Pakistan on 17 May 2002.
"We are unable to release further information at this stage because the wider investigation into other potential criminal conduct arising from allegations made by Mr Mohamed in interviews with the police is still ongoing."
The "wider investigation" is understood to refer to an inquiry into claims MI6 officials have also been linked to torture.
Detectives from Scotland Yard's specialist crime wing are examining "the conditions under which a non-Briton was held" and "potential involvement of British personnel".
A Metropolitan Police spokesman declined to comment. He said: "We will not give a running commentary."
MI5 Director General Jonathan Evans welcomed the DPP's decision.
"I am delighted that after a thorough police investigation the Crown Prosecution Service has concluded that Witness B has no case to answer in respect of his interviewing of Mr Binyam Mohammed," he said in a statement.
"Witness B is a dedicated public servant who has worked with skill and courage over many years to keep the people of this country safe from terrorism and I regret that he has had to endure this long and difficult process."
Mr Mohamed, an Ethiopian Muslim convert who lived in west London after seeking asylum in 1994, was arrested in Pakistan in 2002.
He claimed he was tortured into falsely confessing to terrorist activities and held incommunicado without access to a lawyer for more than two-and-a-half years.
The terror suspect said he was secretly transported to Morocco and tortured before being flown to Afghanistan and then Guantanamo Bay, Cuba, in September 2004.
The United States government dropped all charges against him in October 2008 and he was released and returned to Britain in February 2009.
It emerged yesterday that secret payouts will be made to 16 former Guantanamo Bay detainees, including Mr Mohamed.
Justice Secretary Kenneth Clarke said the controversial move was necessary to avoid a protracted, complex and expensive legal battle.
Others are believed to include Bishar Al Rawi, Jamil El Banna, Richard Belmar, Omar Deghayes and Martin Mubanga.
Their allegations included claims that the Government knew they were being illegally transferred to Guantanamo Bay but failed to prevent it.
There were also allegations that British security and intelligence officials colluded in their torture and abuse while they were held abroad.
Other allegations included that British agents witnessed mistreatment, including the use of hoods and shackles.
Mr Starmer's decision could bring a broader inquiry into claims of British complicity in torture during the war against terror a step closer.
It is hoped former Appeal Court judge Sir Peter Gibson will begin the independent inquiry by the end of this year and report within 12 months.
Shami Chakrabarti, director of civil rights group Liberty, said: "Now it is clear that no criminal charges are to be brought against Witness B, it is vital that the remaining criminal investigations are concluded promptly and we move to the full Gibson inquiry as soon as possible.
"No one is looking for junior scapegoats in this scandal. Accountability like decision-making must go to the heart of Government on both sides of the Atlantic and that is what only a robust and open judicial inquiry can achieve."
Human rights group Reprieve welcomed the news that the police were pursuing wider investigations into the abuse of Mr Mohamed and others.
Tim Cooke-Hurle, investigator on the charity's secret prisons and extraordinary renditions team, said: "Rather than scape-goating frontline officers, the investigation must focus on the chain of command that may have allowed torture complicity by the British Security and Intelligence Services, to ensure that it never happens again."