The Crown has dropped its civil lawsuit against the three men who caused more than $1 million in damage to a spy base in Marlborough.
In 2008, Dominican friar Peter Murnane, farmer Samuel Land and teacher Adrian Leason entered Waihopai and punctured an inflatable dome covering a large satellite dish.
The three peace protesters believed the base was being used to further the Iraq war.
The trio were acquitted of criminal charges in 2010, but the court found them liable for $1.2 million in damages.
The attorney-general filed trespass charges and sought the cost of repairs to the facility.
The civil lawsuit was won in the High Court, and in October last year, the men had their appeal against it dismissed. But the Government announced today it was no longer suing the men for the money.
The attorney-general has so far not commented on why the lawsuit has been dropped.
The Green Party has welcomed the Government decision.
Security and intelligence spokesperson Steffan Browning said it was "vindictive" for the Government to seek the money in the first place.
"From the beginning, the Government should have respected the jury's decision that found the Waihopai Three not guilty and chosen not to pursue the activists for damages," he said.
"This whole process has been a waste of taxpayers' money.
"These activists were campaigning to close down Waihopai, a foreign spy base on New Zealand soil, as an attempt to advance the cause of peace and to draw attention to the spying activity of the GCSB."
Murnane, who is in his early 70s, has not had a bank account for half a century.
All three have said they had no money to pay damages.
- © Fairfax NZ News