Attorney General Dominic Grieve has ruled out asking the High Court to order an inquest into the death of David Kelly.
David Cameron suggested a full inquest was unnecessary last month, saying the Hutton report into the Government weapons inspector's death had been "fairly clear".
But a group of campaigning doctors, led by Dr Stephen Frost, accused the Government of being "complicit in a determined and concerted cover-up", saying they would now seek a judicial review of Mr Grieve's decision.
Speaking in the Commons, Mr Grieve told MPs the evidence that Dr Kelly took his own life was "overwhelming".
There was no evidence to support claims he was murdered or "any kind of conspiracy theory", he said.
The scientist's body was found in woods close to his Oxfordshire home in 2003, shortly after he had been revealed as the source of a BBC report questioning the accuracy of a government dossier arguing the case for war in Iraq.
The Hutton Inquiry in 2004 found that Dr Kelly committed suicide, and then-justice secretary Lord Falconer ruled the inquiry could take the place of an inquest in the coroner's court.
But the doctors pointed out that Lord Hutton spent only half a day of his 24-day inquiry considering the cause of Dr Kelly's death.
They have denounced the Hutton report as a "whitewash" which "failed adequately to address the cause of death itself and the manner of death".
They argued: "No coroner in the land would have reached a suicide verdict on the evidence which Lord Hutton heard.
"The coroner is required to hear evidence which constitutes proof beyond reasonable doubt that the deceased killed himself and that he intended to kill himself, before he may return a verdict of suicide. Lord Hutton did not hear evidence which came near to satisfying that test."
Dr Frost said: "It is therefore very surprising and perplexing that the Attorney General today supports those who wish to deny Dr Kelly a proper inquest.
"This is clearly a political decision when it should have been a decision based solely on the law.
"This Government has now revealed itself to be complicit in a determined and concerted cover-up.
"Four successive governments have sought to obscure the truth of what happened. The cover-up could not be more obvious."
He condemned the "deeply flawed" decision, saying it had "no basis in law", and called for Mr Grieve to resign.
"As a lawyer, his position as Attorney General is now untenable and he will no doubt be subject to reasonable demands that he resign," Dr Frost said.
"The continuing cover-up of the truth of what happened is a national disgrace and should be of concern to all British citizens."
He went on: "We intend vigorously to contest the decision of the Attorney General at the High Court of Justice through judicial review of that decision.
"We need the public's support and a fund has been set up for the possibility that we will be required to pay the Government's legal costs were we to lose.
"The public interest of due process of the law being observed by the Government which serves the British people cannot be trumped by any other purported public interest."
Dr Frost added: "A proper inquest into the suspicious death of any British citizen is required by the laws of this country.
"Everyone now knows that the Hutton Inquiry, which purported to fulfil the coronial requirement, was a woefully inadequate instrument for investigating this most important death, especially given the highly controversial context of illegal war in which the death of this loyal and brilliant public servant took place.
"It is highly regrettable that Dominic Grieve has sought, as did the coroner Nicholas Gardiner before him, to rubber-stamp the clear subversion of due process of the law that the derailing of the inquest by Lord Falconer on August 13, 2003 constituted."
Earlier, former prime minister Tony Blair told the BBC Breakfast programme that as far as he knew the questions surrounding Dr Kelly's death had been answered by the Hutton report and that he "frankly" doubted that the Attorney General had different information.
A key focus of the doctors' concerns were the differing descriptions from witnesses as to how Dr Kelly's body was found, and whether it had been moved, Mr Grieve said.
"This issue has proven fertile ground for imaginative speculation to take over," he told MPs.
But he insisted all the evidence from the careful forensic examination of the scene and his own detailed review supports the view that "Dr Kelly died where he was found and from the causes determined".
"There is no evidence I've seen that would suggest any other explanation, or that would suggest any cover-up or conspiracy whatsoever," he said.
Stressing his findings were his own and his alone, Mr Grieve went on: "I've received no representations of any kind from the prime minister or any other ministerial colleague on this decision.
"The suggestion that Dr Kelly didn't take his own life is not based on positive evidence as such, but on the criticism of the findings of the investigation and inquiry."
He added that while the doctors were expert in their own areas, they were not qualified forensic pathologists.
Mr Grieve went on: "Having given all the material that's been sent to me the most careful consideration, I've concluded that the evidence that Dr Kelly took his own life is overwhelmingly strong.
"Further, there is nothing I've seen that supports any allegation that Dr Kelly was murdered or that his death was the subject of any kind of conspiracy or cover-up.
"In my view, no purpose would be served by my making an application to the High Court for an inquest, and indeed I have no reasonable basis for doing so.
"There is no possibility that at an inquest a verdict other than suicide would be returned."
Mr Grieve also offered his "sincere sympathy" to Dr Kelly's family, "not simply for their loss, great though that undoubtedly is, but for having to bear that loss in the glare of intrusive publicity over such a long period of time".
"While I realise that it will always be impossible to satisfy everyone, I would hope for their sakes that a line can now be drawn under this matter."
But in a further statement, the doctors, including Michael Powers QC, said they were "perplexed and outraged" with the decision.
"These matters are of such juridical and constitutional importance that the campaign will continue unabated," they said.