Mayor Ken Livingstone will not be investigated by a standards watchdog for comments likening the US ambassador to a "chiselling little crook".
Mr Livingstone wants diplomats to pay the charge
The Standards Board for England has written to his office, saying the words were not "sufficiently serious" to warrant further investigation.
The mayor had criticised US diplomats for refusing to pay the £8-a-day charge to drive into central London.
The US embassy argues it does not pay "taxes" under the Vienna Convention.
The mayor maintains the congestion charge is not a tax, but a toll for services.
Commenting on the decision, Mr Livingstone said: "This now enables us to concentrate on the central issue, which is that the US embassy should pay the congestion charge."
The US embassy is not the only one to refuse to pay; several others have also refrained although the Embassy of the United Arab Emirates has agreed to pay and clear its £99,950 of outstanding fines.
But the mayor has directed most of his anger at new US Ambassador Robert Tuttle, because he says US diplomats stopped paying when he arrived last July.
In an interview, he said: "It would actually be quite nice if the American ambassador in Britain could pay the charge that everybody else is paying and not actually try and skive out of it like some chiselling little crook."
The mayor's comments about Ambassador Tuttle earned him another referral to the Standards Board, shortly after he was investigated for likening a Jewish reporter to a concentration camp guard.
Gerald Hartup, director of Liberty and Law, which made the complaint, had argued the mayor was in breach of the code's requirement that members must treat others with respect.
On Friday his office released a statement saying Mr Livingstone had received a letter from the Standards Board indicating it had decided not to investigate the allegation.
But he currently faces another investigation, by the Greater London Authority, for comments made to two wealthy businessmen who hold a 50% stake in the £4bn Olympic City planned for Stratford.