There is “insufficient evidence” to charge anyone from MI6 with involvement in the rendition of two men and their families to Libya, prosecutors say.
Ex-Libyan dissident Abdel Hakim Belhaj says MI6 helped to arrange his and his wife’s rendition – saying they were covertly taken from Thailand to Libya.
Sami al-Saadi and his family were also sent to Libya in 2004, where he was allegedly tortured.
Prosecutors said UK officials did not transfer or ill-treat alleged victims.
Mr Belhaj told the BBC he was “very disappointed that individuals responsible” would not be prosecuted, adding: “If there is political interference with the courts, then it undermines British justice.”
Rendition involves sending a person from one country to another for imprisonment and interrogation, probably by methods such as torture.
Mr Belhaj, who commanded an armed opposition group against Libyan dictator Colonel Muammar Gaddafi, and his wife, Fatima Boudchar, had been trying to seek asylum in the UK when they were taken from Bangkok to Tripoli in 2004.
Their lawyers claimed it was a joint CIA and MI6 operation to help Col Gaddafi round up his enemies.
Mr Belhaj alleges he was tortured by his jailers and questioned by British intelligence officers during a six-year detention.
Mrs Boudchar, who was pregnant at the time of her detention and transfer to Libya, spent four months in a Libyan prison.
Speaking in her first television interview, she told the BBC: “My hands and legs were tied and my eyes were covered. They injected me with something. I didn’t know where I was going.
“I was six months’ pregnant. I was so scared that I was going to die. ”
Separately, Mr al-Saadi and his family were taken from Hong Kong and sent to Libya, where he was allegedly tortured. Memos indicated that MI6 was involved in his transfer.
The Metropolitan Police and the Crown Prosecution Service opened an investigation in January 2012 after documents found following the fall of Col Gaddafi suggested that MI6 had been involved in the rendition operation.
These included letters signed by “Mark”. It is alleged that this is Sir Mark Allen, then MI6 director of counter terrorism.
In a letter to Moussa Koussa, head of Col Gaddafi’s intelligence agency, dated March 2004, “Mark” thanked him for helping to arrange a meeting in the desert between then Prime Minister Tony Blair and Col Gaddafi, as part of a warming of relations between the UK and Libya.
“Mark” wrote: “More importantly, I congratulate you on the safe arrival of Abu Abd Allah Sadiq (Mr Belhaj)… This was the least we could do for you and for Libya to demonstrate the remarkable relationship we have built over the years.”
The Crown Prosecution Service (CPS) said the unnamed public official was investigated for aiding, abetting, counselling or procuring any offence of torture, and misconduct in public office.
Sue Hemming, of the CPS, said: “Following a thorough investigation, the CPS has decided that there is insufficient evidence to charge the suspect with any criminal offence.
“We made our decision based upon all the available admissible evidence and after weighing up all of the information we have been provided with.”
Mr Belhaj’s lawyer Cori Crider told the BBC: “This suggests to me the security services are functionally above the law. If you’re not going to charge in this case, then when are you going to charge?”
Lib Dem MP Alistair Carmichael has called for the government to make a statement to MPs following the CPS’s decision.
Both Mr al-Saadi and Mr Belhaj pursued civil claims against the British government and named individuals. Mr al-Saadi settled out of court, but Mr Belhaj’s case is continuing.