One of the men caught up in police raids on alleged military-style training camps in the Ureweras says the stress of a trial has cost relationships and jobs.
Omar Hamed and 12 others had been facing firearms charges, before the Crown decided not to pursue the case to trial after a Supreme Court decision.
The Supreme Court has ruled certain evidence inadmissible at the so-called "terror raid'' trial which had been set to begin next February and last for three months.
The ground-breaking decision overruled previous judgments from the High Court and Court of Appeal over whether the Crown could use evidence gathered in the covert police operation before the arrests in October 2007.
The Crown has now dropped the Operation Eight prosecution against 13 of the 17 accused, according to a statement released by the Auckland Crown Solicitor, Simon Moore SC.
But four of the accused, including Tame Iti, will still stand trial on charges of participating in an organised crime group and firearms charges.
Mr Hamed said he has spent the last four years waiting for the trial to begin.
"The stress of it... the stress on your family, friends, relationships and on your work means you cannot plan.
"The police used that to try to break us down but none of that worked and we held out,'' Mr Hamed said.
He said others who faced charges as a result of the raids had lost their homes and jobs.
Mr Hamed said he received today's news at a protest for West Papua.
"I got the phone call from the lawyer. He said: Oh, you're walking, congratulations.
"Apparently, I owe him lunch.''
Mr Hamed said he always knew that the charges would be dropped.
"It's a real victory for common sense and New Zealand sticking up for human rights.''
His former co-accused, Valerie Morse described the case as a ``disaster from start to finish.''
"They arrested us and put us in prison while they tried to charge us with terrorism. That failed. Now after four years, millions and millions of dollars, and systematic denial of rights to accused, the case has totally failed,'' said Ms Morse.
She said the Supreme Court's decision was an indictment on the police.
The Supreme Court's reasons behind the judgement remain under tight suppression orders and cannot be reported.
Mr Moore said as a result of the Supreme Court decision, the Crown no longer believes there is sufficient evidence to justify the Arms Act charges against 13 of the 17 accused. One of the original 18 charged, Tuhoe Francis Lambert, died earlier this year.
He said separate trials would now be needed for those charged under the Arms Act and the four accused of the organised crime offences.
"The effect of the delay would be that those accused facing Arms Act charges alone would not be tried for a period of four and a half years from the date of their arrest,'' said Mr Moore.
"Further, they were remanded in custody for a period of time following their arrest, and they have been on restrictive bail conditions through much of the time since their release.
"Taking these matters into account together with findings made by the Supreme Court about the seriousness of their offending, it is the Crown decision that the continuation of proceedings would not be in the public interest.''
The Supreme Court ruling does not affect the trial of Tame Iti, Emily Bailey, Te Rangikaiwhiria Kemara and Urs Signer on firearms and organised crime charges.
Mr Moore said the Crown will apply to the High Court for orders to permit publication of various judgments, currently suppressed, in the interests of open justice for matters of significant public interest.
"It is anticipated that a special hearing will be convened so that all accused other than the four charged with the organised criminal group charge can be discharged as soon as possible.''
The early-morning raids in October 2007 involved more than 300 officers in property searches in Auckland, Waikato, Bay of Plenty, Wellington and Christchurch using warrants alleging crimes under the Terrorism Suppression Act.
The Solicitor-General subsequently ruled out charges under the Terrorism Suppression Act - saying the law was "almost impossible to apply in a coherent manner'' - but firearms charges still remain.
The case has dragged out for nearly four years and cost taxpayers hundreds of thousands of dollars.