The Metropolitan Police has decided to drop its demand that the Guardian reveal the names of sources for stories related to phone hacking.
Scotland Yard had been widely condemned by other media outlets for the suggestion it would use the Official Secrets Act to force journalists at the paper to reveal their sources.
In a statement issued on Tuesday evening, the Met said it had decided not to pursue the matter "at this time".
"This decision does not mean that the investigation has been concluded. This investigation, led by the DPS - not Operation Weeting - has always been about establishing whether a police officer has leaked information, and gathering any evidence that proves or disproves that.
"Despite recent media reports, there was no intention to target journalists or disregard journalists’ obligations to protect their sources," the Met said.
"It is not acceptable for police officers to leak information about any investigation, let alone one as sensitive and high profile as Operation Weeting."
A hearing had been scheduled to take place on Friday, but the Crown Prosecution Service said it required more information from the Met.
Alan Rusbridger, the Guardian's editor, said he welcomed the move.
"Threatening reporters with the Official Secrets Act was a sinister new device to get round the protection of journalists' confidential sources," he said.