Mr McCartney said"no one will be prosecuted",meaning police will also not pursue formerintelligence official Cameron Gill whosehome was raided in September with a warrant that cited an alleged breach of intelligence laws.

In a statement released on Wednesday afternoon,Mr Gill's lawyer Michael Kukulies-Smith said it was"extremely regrettable"the former official's home was raided by police,attracting significant media attention.

"Mr Gill did nothing wrong and was not responsible for the unauthorised disclosure. He also cooperated fully throughout the investigation,"Mr Kukulies-Smith said.

He criticised police for not apologising or remedying their actions which he said had damaged his client's professional reputation and personal health.

"Mr Gill is now considering his legal options to pursue this matter further,"he said.

Asked about the investigation into the leak of documents concerning alleged misconduct by Australian special forces in Afghanistan to the ABC,Mr McCartney said it was"still under active investigation"and had also been delayed by the broadcaster'sFederal Court challenge.

"We are focused on moving this matter as quickly and expeditiously as we can,"he said.

The search of Smethurst's home – and raid on the ABC the next day – sparked a national debate about press freedom and"Australia's Right to Know"coalition of media organisationslaunched a campaign for reforms to protect public interest journalism.

News Corp Australia executive chairman Michael Miller welcomed the decision saying"common sense has prevailed",but said Smethurst had spent almost a year living with"the threat of jail for simply doing her job of informing the Australian public on a matter of serious public interest".

He said the decision to drop the investigation shows why the law reform proposals championed by'Australia's Right to Know'coalition – particularly contestable warrants and shifting the burden of proof from the defendant – are"sensible and essential".

Law Council of Australia president Pauline Wright welcomed the end of the investigation but said secrecy laws still threatened public interest journalism.

"The law continues to leave journalists and media organisations exposed to possible police investigation and prosecution,"Ms Wright said.

Shadow attorney-general Mark Dreyfus said the decision was welcome news but urged the government to rule out prosecution of the ABC journalists and pursue law reform.

"The law needs to be changed to make it clear that journalists in Australia are not to be prosecuted,are not to be threatened with the criminal law just for doing their jobs. It's a very important principle,"he said.

Attorney-General Christian Porter said the complaint that triggered the Smethurst investigation was made independently by the secretary of the Department of Defence and the police inquiries were also conducted independently from the government.

"They are decisions,which quite properly in our system,are made totally independently of ministers in executive government,"he said.

"I find it,I must say,frustrating that it did take that long for the matter to be resolved."

Mr McCartney said leak investigations were complex and the High Court challenge had delayed progress.