The French news agency AFP says the French supreme court has rejected a new appeal to have him extradited to Britain.
In November last year, a Paris court of appeal ruled that Mr Shayler, 33, should not be returned to Britain to face charges of divulging state secrets on the basis his alleged offences were political in nature.
Mr Shayler, who had spent four months in detention, was released.
It now appears the French supreme court has backed this judgement.
Government trying to make life 'tough'
Last month, the former agent opted not to renew his passport in person so as to avoid stepping onto what is technically British territory inside the Paris embassy.
He said he'd been warned by his French lawyers that he risked being detained.
"The government," he said, "had used every single trick it can to try to make my life as tough as possible, so they could do it again."
In the event, his girlfriend made the renewal application.
A Home Office spokeswoman confirmed that moves to extradite Mr Shayler back to Britain from France had failed.
However she added: "He still remains liable to prosecution if he returns to the UK."
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