An Old Bailey judge threw out the evidence yesterday of Gary Eaton, whom he labelled a liar, and whose unreliability had previously been revealed during the trial of suspects in the 1987 murder of the private detective Daniel Morgan.
The Daniel Morgan murder trial collapsed earlier this year when its three key witnesses, Eaton among them, were found to be unreliable.
Now a second trial based on allegations made by Eaton has been dropped for the same reason.
Mandy Fleming is facing jail for a lesser charge after admitting to sinking her husband's £90,000 luxury cruiser in Brighton on Valentine's Day in 2004.
Fleming, 47, who is now divorced from the haulage company director Adam Fleming, 42, pleaded guilty to damaging the Double Dragon, recklessly endangering life.
Fleming was originally charged with conspiring to kill her husband, but the charge was dropped through a lack of evidence until Eaton offered his account of a conspiracy to murder.
Eaton, 53, a career criminal, came forward to give evidence in both cases after signing a supergrass deal which saw him pleading guilty to a number of offences.
He admitted being part of the plot to kill Mr Fleming and his sentence was reduced from 27 years to three years as a result of the deal in 2008.
But he never gave evidence in either case because both judges said he was capable of making up evidence.
Fleming's then-boyfriend David Brown, 50, of Sheerness, and Bradley Hanson, 27, of The Haven, Littlehampton, West Sussex, were also cleared of conspiracy to murder.
Judge Richard Hone said the charge of conspiracy to murder depended on the evidence of Eaton, and he had to halt the case in the interests of justice.
He said: "By the time of summing up of Gary Eaton's evidence of unreliability, fabrication and fantasy had concluded, it would be impossible to find a sufficient bedrock of truth upon which a properly directed jury could convict any of these defendants."
In his 12-page judgement on the case, Judge Hone described Eaton as "not just unreliable but false and highly dangerous".
"Eaton is capable of inventing detailed accounts of events which never happened and shows either blatant untruthfulness or alternatively a component of his personality disorder typified by folie de grandeur and self aggrandisement," he said.