The long-awaited inquiry into British complicity in torture is to be scrapped following the launch of fresh criminal investigations into claims of ill-treatment in Libya, the Justice Secretary said today.
Kenneth Clarke said there "now appears no prospect of the Gibson Inquiry being able to start in the foreseeable future".
The inquiry's work will be brought "to a conclusion" but the Government still intends to hold "an independent, judge-led inquiry once all police investigations have concluded", Mr Clarke told MPs.
Mr Clarke told MPs: "We remain committed to drawing a line under these issues.
"However, these further investigations may take some considerable time to conclude.
"The Government fully intends to hold a judge-led inquiry into these issues once it is possible to do so and all related police investigations have been concluded.
"But there now appears no prospect of the Gibson Inquiry being able to start in the foreseeable future.
"So, following consultation with Sir Peter Gibson, the inquiry chair, we have decided to bring the work of this inquiry to a conclusion."
He went on: "We will continue to keep Parliament fully informed of progress.
"The Government fully intends to hold an independent, judge-led inquiry, once all police investigations have concluded, to establish the full facts and draw a line under these issues."
Mr Clarke said it would have been unfair to the inquiry team to continue keeping it on hold for an "as yet unknown period of time" while the Libyan investigations were carried out.
Scotland Yard took three years looking into the cases of Guantanamo Bay detainees, he said.
Mr Clarke added that any new inquiry "may require a fresh group of people to carry it out".
The detainee inquiry had already been widely criticised for lacking "credibility or transparency", with human rights groups and lawyers for detainees refusing to take part.
Campaigners, who are angry at the limits on the inquiry's powers and the fact that the final decision on whether material can be made public rested with the Government, also claimed the police investigation was being "hobbled" by political pressure for a "sham" inquiry.
Mr Clarke added that the inquiry would "provide the Government with a report on its preparatory work to date, highlighting particular themes or issues which might be the subject of further examination".
"The Government is clear that as much of this report as possible will be made public," he said.
Sir Peter said: "The inquiry regrets the fact that we are not able to complete the task we were asked to do by the Prime Minister.
"However, we recognise that it is not practical for the inquiry to continue for an indefinite period to wait for the conclusion of the police investigations.
"The inquiry has, however, already done a large amount of preliminary work, including the collation of many documents from Government departments and the security and intelligence agencies.
"We welcome, therefore, the opportunity to bring together the work we have done to date.
"The inquiry will, therefore, produce a report of our work, highlighting themes which might be subject to further examination.
"This task now set for us remains an important one: it will ensure that the work we have done is not wasted and we hope that it will materially assist the future inquiry that the Government intends to establish."
In the Commons, former justice secretary Jack Straw said Mr Clarke's decision to end the current inquiry was "absolutely right" and added that he "perhaps had no alternative".
Sir Malcolm Rifkind, chairman of the Intelligence and Security Committee, said the committee would consider the implications of today's announcement for its own investigation of rendition issues at its meeting tomorrow.
Shami Chakrabarti, director of the civil rights group Liberty, said: "We welcome the sensible decision to end the embarrassment of a so-called inquiry in which neither torture victims nor human rights campaigners had faith.
"Let's remember that it was lawyers, journalists and campaigners that uncovered the Libyan rendition files now to be properly investigated by police and prosecutors.
"Such revelations should lead to more scrutiny of the secret state, not the shutting-down of open justice as proposed in the Government's current Green Paper."
It comes after police and prosecutors said last week that allegations from two Libyan rebels, Sami al Saadi and Abdel Hakim Belhadj, that British spies were complicit in their rendition and ill-treatment in 2004 were so serious that they must be investigated immediately.
Mr Clarke said both MI5 and MI6 "will continue to review their records and we will ensure that this process is thorough and comprehensive".
He added that the latest Libyan allegations had come as a "surprise".
One of the detainees at the centre of the new criminal inquiry has said Libyans need justice over claims that British spies were involved in rendition and torture before the two countries can forge a positive relationship for the future.
Abdel Hakim Belhadj, one of the leaders of anti-Gaddafi forces, said his rendition was "harrowing" and called for the police "to find not just the rank-and-file agents, but those ministers who were truly responsible".
Mr Belhadj, 45, a Libyan rebel commander who was living in exile in Beijing, China, says he was tortured after being detained with his wife in 2004 en route to the UK where they were trying to seek asylum.
Also known as Abu Abd Allah Sadiq, Mr Belhadj was held for six years in prisons in Libya, and claims he was interrogated by "foreign" agents, including some from the UK.
His wife was also imprisoned in Libya for four months, then released just before she gave birth, they say.
The Scotland Yard investigation will also consider similar claims made by Sami al Saadi, another opponent of the Gaddafi regime.
Mr al Saadi, 45, also known as Abu Munthir, said he was stopped, along with his wife and four young children, when he was flying to the UK from his home in Hong Kong in 2004 and taken to Tripoli.
Documents were later discovered showing that British personnel were instrumental in his detention and rendition, he said.
Clare Algar, executive director of Reprieve, said the Gibson Inquiry "simply did not have the powers or the independence to get to the truth".
"We therefore look forward to working with the Government to ensure that an inquiry with real clout and real independence is established once these investigations have concluded," she said.
"This is essential to ensuring that we find out who signed off on Britain's collaboration in some of the worst excesses of the 'war on terror'."
Richard Stein, who is representing the two Libyans, welcomed the scrapping of the inquiry.
Mr Stein, the head of human rights at law firm Leigh Day & Co, said: "It was ill conceived from the beginning, the Government reserved the right for the final say on what material would be published, and did not allow for cross-examination or any other way of testing the evidence from members of the UK security services, which was to be given secretly.
"If there is to be a future inquiry following the police investigations into my client's allegations, then it must have credibility, allowing the official version of events to be challenged."
Amnesty International's Europe and Central Asia director Nicola Duckworth added it was "time for the UK Government to come clean about the past, and to be seen to do so".
"The detainee inquiry was never fit for purpose, and fell short of the UK's international human rights obligations to fully and independently investigate allegations of UK involvement in torture and ill-treatment," she said.
"We hope that the Government seizes the opportunity presented by the mounting allegations of UK involvement, the ongoing criminal investigations into specific cases, and the report of the Detainee Inquiry's work to date, to establish a human rights-compliant inquiry that ensures real accountability."
Keith Best, chief executive of Freedom from Torture, also said the inquiry's credibility was "shot months ago".
"The Government now has the time to design such a process that will secure the support of the survivors of torture - while the criminal investigations into rendition to Libya run their course," he said.