The paper said it was regrettable the witness could not give evidence about Max Mosley
The court case involving the News of the World and motorsport boss Max Mosley has been adjourned after one witness was not able to give evidence.
Mr Mosley is suing the newspaper for breach of privacy when it alleged there was a Nazi theme to a sex orgy.
Defence lawyers said that informant E's "emotional and mental state is such that it would not be fair or reasonable to call her to give evidence."
The case was adjourned until Monday for counsel to prepare closing speeches.
Witness E, a dominatrix who secretly filmed the sadomasochistic session at a London flat in March, was due to give evidence with her husband.
Mark Warby, QC for the News of the World, told Mr Justice Eady at London's High Court that "we will not persist" with the case that E received instructions from Mr Mosley via another woman about a Nazi theme.
"It is a most regrettable situation to have arrived at."
However, the newspaper was still maintaining that there was a Nazi theme - based on other evidence.
Mr Mosley, president of the FIA, the governing body for Formula 1 racing, says his life has been devastated by the News of the World story.
He is asking for an award of punitive, as well as compensatory, damages.