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Prosecutor Alison Levitt QC says the Guardian's special investigations correspondent Amelia Hill and a 51-year-old detective constable working on Scotland Yard's Operation Weeting team will not be charged over leaks relating to the phone-hacking investigation.
A statement on the Guardian's website said:
"We welcome the Crown Prosecution Service's sensible decision to abandon this worrying attempt to criminalise legitimate contact between journalists and confidential sources.
"Nevertheless, the paper makes no comment on the validity of the Met Police assertion that the officer it identified was Amelia's source in this case."
Ms Levitt, the principal legal advisor to the Director of Public Prosecutions, said 10 articles written by Ms Hill in the Guardian "contained confidential information derived from Operation Weeting, including the names of those who had been arrested.
"I am also satisfied that there is sufficient evidence to establish that the police officer disclosed that information to Ms Hill."
But the prosecutor added: "I have concluded that there is insufficient evidence against either suspect to provide a realistic prospect of conviction for the common law offence of misconduct in a public office or conspiracy to commit misconduct in a public office."
Read the full Crown Prosecution Service statement setting out why a Guardian journalist and a Scotland Yard detective will not be prosecuted over leaks relating to the phone-hacking scandal.
Prosecutor Alison Levitt QC said she had "written to the Metropolitan Police Service and to the IPCC recommending that they consider bringing disciplinary proceedings against " the 51-year-old Scotland Yard detective.
The police officer has been suspended since being arrested at his desk last August by officers from the force's directorate of professional standards.
The Guardian's special investigations correspondent Amelia Hill and a 51-year-old detective constable working on Scotland Yard's Operation Weeting team will not be charged over leaks relating to the phone-hacking investigation, the Crown Prosecution Service said.