The Crown Prosecution Service this week told Mr Venables, Mr Clough and Frank McLintock, the middleman accused of handing over the cash in a brown paper bag at a motorway service station, that no charges would be brought.
Mr Venables said last night that he was delighted by the decision. The possibility of prosecution for theft, false accounting and corruption - the allegations at the centre of the inquiry - had threatened his tenure as England manager since they were raised by Alan Sugar, the chairman of Tottenham Hotspur, as a reason for the sacking of Mr Venables as Tottenham manager and chief executive last year.
Speaking from a holiday hotel in Italy, Mr Venables said: 'It's been an awful wait and I'm glad it's over. It's been frustrating because I knew I had done nothing wrong, but it's great news.'
Mr Venables is suing Mr Sugar, the multimillionare chairman of Amstrad, for breach of contract and unfair dismissal. Friends said yesterday they hoped the decision would lead to an out-of-court settlement, but the England manager refused to speculate. 'I have said things in the past and got them wrong,' he said. 'This time I'm saying nothing.'
The furore over the alleged payment caused one of the biggest scandals in British football. At a High Court hearing in June last year Mr Sugar sought to justify his removal of Mr Venables, his one-time partner.
In an affidavit read out in court, Mr Sugar said Mr Venables talked of paying a pounds 50,000 'bung' to Brian Clough to arrange the pounds 2.1m transfer of Teddy Sheringham, a Forest player who has become an England international.
'Mr Venables told me 'Mr Clough likes a bung' and said he (Mr Clough) would receive personal payment for agreeing to sell Mr Sheringham,' he said. 'I told him that it was absolutely out of the question and it was not a way in which Tottenham or I would conduct our business.'
It was then alleged that the money was paid via Mr McLintock, 54, a respected football agent, an MBE and former Scottish international. But Mr Venables, Mr McLintock, Mr Clough and Eddie Ashby, Mr Venables's personal assistant, who was also said to have been involved, strongly denied the accusation.
A letter from a detective inspector in the Metropolitan and City company fraud office, obtained by the Independent, says: 'The view expressed (by the fraud investigation group of the Crown Prosecution Service) is that there is unlikely to be sufficient evidence to give a realistic prospect of conviction.'
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