The charges against seven UK soldiers accused of murdering an Iraqi civilian have been dismissed by a judge at a court martial in Colchester, Essex.
The military panel was directed to clear the defendants of the charges
He ruled there was insufficient evidence against the seven, accused of murdering Nadhem Abdullah.
The 18-year-old was alleged to have died following an attack on Iraqi civilians in al-Ferkah, southern Iraq, in May 2003.
The Parachute Regiment soldiers always denied murder and violent disorder.
The cleared soldiers are Corporal Scott Evans, 32, and Privates Billy Nerney, 24, Samuel May, 25, Morne Vosloo, 26, Daniel Harding, 25, Roberto Di Gregorio, 24, and Scott Jackson, 26.
The trial has cost taxpayers an estimated £10m.
Solicitors for the soldiers have complained there had not been strong enough evidence to take the case to trial.
But a spokesman for the Ministry of Defence (MoD) said: "The judge made clear that on the basis of the evidence provided very serious allegations had been made and that it was perfectly proper to take the matter to trial."
Soldiers were not above the law and it was right that the allegations had been "followed up and the evidence tested in full", he added.
During the court martial, Martin Heslop QC, prosecuting, told the court Mr Abdullah was an "innocent" teenager who died after an "unjustified", "unprovoked" and "gratuitous" attack on him.
Three weeks after "formal hostilities" had ceased, the paratroopers had been in pursuit of a white pick-up truck when they passed a white Toyota containing Mr Abdullah and Athar Saddam, Mr Heslop said.
They had boxed in the taxi before dragging the deceased and the driver out and attacking them with "feet, fists, helmets and rifles", he alleged.
Judge Blackett directed the panel hearing the court martial to return a not guilty verdict on all seven defendants after criticising the "inadequate" investigation into the case.
RECENT COLLAPSED CASES
April 2005: Trial of Trooper Kevin Williams for murdering Iraqi civilian collapses after prosecutors offer no evidence
March 2005: Jubilee Line fraud case collapses after 21 months and £60m in costs
Feb 2004: Trial of GCHQ whistle-blower collapses after prosecution offers no evidence
November 2002: Charges against Royal butler Paul Burrell dismissed after £1.5m trial
He said that "after discarding the evidence that is too inherently weak or vague for any sensible person to rely on it" the panel "could never reach the high standard of proof required to be sure of the guilt of any defendant".
The judge said the prosecution team had presented their case "properly and objectively".
"However, it has become clear to everyone involved as the trial has progressed that the main Iraqi witnesses had colluded to exaggerate and lie about the incident."
Three women had admitted lying about being assaulted by British soldiers and one witness had told the court that Mr Abdullah's family encouraged others to tell lies, Judge Blackett said.
Witnesses some distance from the scene "could not possibly have seen what they said they saw", he added.
And Iraqi court witnesses had used the case to seek "compensation to what were patently exaggerated claims", he said.
One witness at the court martial, Samira Rishek, a Marsh-Arab who had claimed to have been brutally beaten by the soldiers while she was pregnant, admitted to the court it was a "wicked lie".
The court heard that Mrs Rishek, along with other witnesses, was paid $100 a day to give evidence at the trial and that she only agreed to give evidence after being told she would be paid.
BBC correspondent Paul Adams said there was an "underlying sense" that some of the witnesses were "out to try and get something for themselves".
A number of questions were going to be asked about why the trial had been mounted, he added.
Roger Brice, solicitor for defendant Pte Samuel May told BBC News there had never been a case to answer.
"What the judge has done today is stop the case when the prosecution have concluded... there was never a case for any of the defendants to answer.
"He summed up the fact that the evidence as it came out in these last two months has been one of acknowledged lies."