The former Conservative minister, Mr Neil Hamilton, and his wife, Christine, said they were "absolutely delighted and relieved" yesterday after the Metropolitan Police dropped its investigation into allegations that they had committed sexual assault.
The couple were released from their bail conditions more than two weeks after they were arrested on suspicion of sexually assaulting a trainee lecturer, Ms Nadine Milroy-Sloan (28), while she was allegedly being raped by another man at a flat in Ilford, east London, on May 5th.
Scotland Yard said there was no evidence to support the allegations against the Hamiltons, but the investigation into Ms Milroy-Sloan's allegation of rape would continue.
She insisted last night her claims were correct, but in a further development the Hamiltons' lawyer confirmed they had reported to the police an attempt to pervert the course of justice.
Publicist Mr Max Clifford, who advised Ms Milroy-Sloan before she went to the police with her allegations and who was described by the Hamiltons as "lower than vermin", said she was "devastated".
He also criticised the Hamiltons for turning the episode into "a circus" adding: "All she wanted was justice . . . Nadine is devastated and she has told me that she stands by everything she told the police."
The Hamiltons issued a High Court writ for libel against Ms Milroy-Sloan and consistently denied the allegations, accusing police of wrongful arrest when they faced the media nearly every day outside their Cheshire home.
They insisted police had been given details of their movements early in the investigation that proved they were having drinks at Claridges Hotel before entertaining friends at their London home at the time of the alleged attack.
But Scotland Yard defended the decision to investigate the claims, saying the police considered all allegations of sexual assault "extremely seriously".