The cancellation was a recommendation from The Crown Prosecution Service after Leigh admitted he personally accessed a voicemail while investigating the story into corrupt arms deals.
Leigh discussed the public interest defence of the action under oath at the Leveson inquiry on press standards and ethics in late 2011.
A CPS spokesperson said: “We have now considered this file and, although the investigation is not complete, the view has been taken that this is one of those rare cases in which it is clear that, prior to the collection and consideration of all the evidence, the public interest does not require a prosecution. The police have been advised accordingly.”
The CPS came to its decision after applying the code for crown prosecutors and the director of public prosecution’s recently published interim guidelines for assessing the public interest in cases affecting the media.
“In summary, the guidelines say that prosecutors should consider whether the public interest served by the conduct in question outweighs the overall criminality,” the CPS said. “If the answer is yes, it is less likely that a prosecution is required in the public interest. Prosecutors are only able to take such a decision when they are satisfied that the broad extent of the alleged criminality has been determined and that they are able to make a fully informed assessment of the public interest.”
Leigh said the outcome showed the effectiveness of the Director of Public Prosecution’s new guidelines, which were designed to protect journalists acting in the public interest.
“I deliberately publicised, in a 2006 Guardian article, the incident involving me. This was in order to stimulate debate about the difference between legitimate investigative journalism, and the wholesale criminal industry apparently taking place at News International.”