Norway's public prosecutor has dropped all charges against the founder of the radical Islamic group, Ansar al-Islam.
Mullah Krekar denies links to terror groups
The Kurdish group - which is based in northern Iraq - is regarded by the UN and US as a terrorist organisation.
But the Norwegian authorities said there was not enough evidence to charge Mullah Krekar with conspiracy in a plot to murder political rivals in Iraq.
Mullah Krekar has had refugee status in Norway since 1991 - he now faces being deported under a 2003 expulsion order.
The expulsion order, which says Mullah Krekar is a risk to national security, was stalled because of the court case against him and the US-led war in Iraq.
The Kurdish cleric says he stepped down as leader of Ansar al-Islam in 2002 and denies any terror links.
Washington says the group has ties to al-Qaeda and blames it for attacks on coalition forces in Iraq.
Mullah Krekar was released from jail in February this year while the authorities investigated him on suspicion of conspiracy, attempted murder of political rivals in Iraq and inciting criminal activity.
But on Tuesday, prosecutor Tor-Aksel Busch released a statement saying there were "no grounds to charge Mullah Krekar on any count".
September 2002: Arrested at Amsterdam airport; the FBI questions him twice during his detention
January 2003: Krekar is deported to Oslo
February 2003: Oslo says it plans to deport Krekar to Iraq
March 2003: Krekar held on charges of planning terror attacks
April 2003: Krekar released while probe continues
June 2003: Terror charges dropped
January 2004: Krekar held on charges of plotting to murder political rivals
February 2004: Cleric released while inquiry continues
June 2004: All charges against Krekar dropped
The charge of inciting others to commit crimes was dropped because it is not in itself illegal in Norway.
Formal terror charges against the 47-year-old cleric had already been dropped last year because of lack of evidence.
Mullah Krekar - born Najm Faraj Ahmad - was arrested at an airport in the Netherlands in 2002, after Iran denied him entry and sent him back to Europe.
He was deported to Norway in January 2003.