The Northern Ireland Prosecution Service announced that Larry Zaitschek can no longer be prosecuted because of the emergence of new evidence concerning the 2002 break-in at Castlereagh police station.
Mr Zaitschek worked in the base's canteen at the time of the dramatic events, when three intruders breached security and escaped with top secret files believed to have related to police officers and their agents inside paramilitary ranks.
Millions of pounds were spent rehousing officers and others whose security was compromised by the episode.
The Castlereagh raid was one of the most infamous episodes of recent years in Northern Ireland.
The base was the top "holding centre" throughout the Troubles, where paramilitary suspects were held and interrogated.
It was seen as a key centre of operations for police and the breach of security was a major embarrassment.
A police officer on duty in the room where sensitive information was kept was overpowered and the intruders escaped with dozens of files.
The raid, on St Patrick's Day, rocked the peace process.
The IRA denied responsibility, while security forces denied speculation of an inside job.
Mr Zaitschek, a US citizen who has returned to his native country, was sought in connection with the break-in, though he denied involvement.
But the Public Prosecution Service (PPS) said today the test for prosecution in his case was no longer met.
It released a statement which said: "The PPS had previously confirmed that there had been sufficient evidence to prosecute Laurence Zaitschek should he be made amenable in Northern Ireland. All such decisions are kept under continuous review.
"After the original decision for prosecution had been taken, new information came to the attention of the PPS through the chief constable.
"The PPS concluded that a duty of disclosure to the defence arose in respect of this information. It took all possible steps in conjunction with police to make it available.
"However, the chief constable has now confirmed that he is not in a position to make this information available for the purposes of disclosure.
"In those circumstances, the PPS has concluded that the test for prosecution is no longer met as the disclosure obligations placed upon the prosecution cannot be discharged and a fair trial could not thereby be achieved."
In the aftermath of the Castlereagh break-in, Mr Zaitschek returned to the US.
It later emerged that police wanted to question him in connection with the raid.
The man who became known as "Larry the Chef" alleged security force harassment in the period that followed and said he would resist attempts to extradite him.
His wife was said to have entered a witness protection programme in Northern Ireland and Mr Zaitschek claimed he was being kept apart from their young son, Pearse.
Events took a further twist when it emerged that Mr Zaitschek had known top republican Denis Donaldson.
The senior Sinn Fein figure was later exposed as a security force spy and went into hiding before being shot dead by unknown gunmen at an isolated cottage in Co Donegal, where he had been living.
The circumstances of the Castlereagh raid went to the heart of the covert world of intelligence gathering.
A statement issued today by the Police Service of Northern Ireland (PSNI) said it had properly pursued its investigation.
It said: "The PSNI has pursued a rigorous and thorough investigation into the events concerning the aggravated burglary at Castlereagh police station which occurred on March 17 2002.
"All materials and evidence gathered during the course of that investigation and known to the PSNI were properly presented or revealed to the Public Prosecution Service, who initially concluded that the test for prosecution was met.
"Recently, other material, which did not originate from the PSNI or the security and intelligence agencies, was drawn to the attention of the PSNI.
"This was relevant to the facts at issue and the PSNI agreed was such that its disclosure would be necessary in order for Mr Zaitschek to receive a fair trial.
"Despite the efforts of the PSNI, we are not in a position to make available all the relevant material to PPS for the purposes of disclosure.
"Consequently, the PPS have concluded that Mr Zaitschek could not receive a fair trial and PSNI are in agreement that a prosecution could not proceed in those circumstances."
The Northern Ireland Office declined to comment today and said the matter was one for the justice system and not for government.
The efforts to resolve what happened in the raid eventually came to focus on how Mr Zaitschek's case would be handled.
The chef gave media interviews where he repeatedly denied involvement.
He said: "I have not spoken to Denis Donaldson in many years - and even then I only knew him for a brief period of time."
Mr Zaitschek said that in the two days after the break-in he was interviewed twice by police in Belfast.
"I was told: 'We're done with you in our inquiries. Good luck in America. Thanks for all your great food'," he said.
"I left and came back to America. So everyone knew I was leaving. They were done with me. I left, and then this whole story was concocted."
A top level review of the raid was carried out by Sir John Chilcott, who is heading the new inquiry into the war in Iraq.
His assessment of the Castlereagh raid found no evidence to support claims that members of security agencies were involved in the break-in.
Assembly member Ian Paisley Jnr, a member of the Northern Ireland Policing Board, branded the decisions "a disgrace".
"Here we have one of the most symbolic crimes committed against the police in decades - one of the most serious security incidents - and the case is dropped because the police can't use evidence they have.
"I think the public will be outraged at this failure of the criminal justice system to bring this man to justice."
He said the material stolen in the break-in had caused havoc in the security world.
Mr Paisley said he would be raising the matter at the Policing Board. "Unfortunately yesterday was Sir Hugh Orde's last attendance at a board meeting before he retires. But I intend to talk to him about this before he goes at the end of August."
The Northern Ireland Office distanced itself from the decision.
The briefest of statements said: "This is a matter for the PPS and PSNI and not for government."
* The article is from The Belfast Telegraph.
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