The Accident Compensation Corporation maintains "a threat had been made'' by former National Party insider Bronwyn Pullar at December meeting at which a massive privacy breach was discussed.
Police this morning confirmed they would not press charges against Ms Pullar in relation to the meeting where ACC managers claim Ms Pullar threatened to go to the media about the privacy breach unless she was given a two year guaranteed benefit.
"After careful consideration of the evidence now available and a separate legal review of the facts we have determined that no offence has been disclosed,'' Police Assistant Commissioner Malcolm Burgess said in a statement.
Police had since March been considering the matter which embarrassed the corporation and the Government, and led to the resignation of former ACC Minister Nick Smith.
An ACC case manager last year mistakenly sent Ms Pullar information about 6700 other claimants.
Ms Pullar and her friend and former National Party President Michelle Boag who also attended that December meeting have both always strongly denied any attempt to use the information to extract financial gain.
An ACC report on the meeting found Ms Pullar "proposed in relation to her own individual case she would like to negotiate a guaranteed benefit payment for two years''.
"She made threats that if her demands weren't met, she would not return the information and would inform the media.''
ACC Chairman John Judge this afternoon said he was completely satisfied the report was a "complete and accurate'' account of what took place at the meeting.
"Our staff at the meeting considered that a threat had been made... They felt pressure.''
ACC chief executive Ralph Stewart said the corporation had "zero tolerance of wrongdoing and we felt obliged to seek an independent opinion to confirm whether there was wrong-doing that was sufficiently serious for Police to lay charges''.
"Should ACC be confronted with a similar situation the same action will be taken,'' he said.
However, the police decision today meant from ACC's perspective, "this matter is closed and we will not engage on it any further''.
Dr Smith resigned from his Local Government, Environment and Climate Change portfolios after the Herald revealed he had written a letter in support of Ms Pullar's ACC claim while he was ACC minister in 2010.
ACC Minister Judith Collins is taking legal action against Labour MPs Trevor Mallard and Andrew Little after they made comments linking her to the leak of an email sent to her by Ms Boag which discussed the December meeting.
The leak of the email to the Herald On Sunday identified Ms Pullar as being at the centre of the matter and prompted sources to come forward with information about Dr Smith's letter.
Ms Pullar said she was unsurprised by the police decision.
"Had ACC and the Minister verified with me the accuracy of their report before publishing it this issue would have been resolved in minutes,'' she said in a statement.
"It was unnecessary for ACC to have involved the police.''
She said Mr Stewart and other senior ACC managers received a transcript and had heard a complete recording of the December meeting.
"This primary factual evidence proved ACC's report was false and police involvement was unwarranted. ACC were invited at that time to take appropriate action with the police, but declined to do so.
"I thank the police for reaching the right decision, and it is regrettable that police time has been wasted.''