Deputy Assistant Commissioner Martin Hewitt said MI6 worker Gareth Williams' death was "most probably" an accident, although he admitted: "No evidence has been identified to establish the full circumstances of Gareth's death beyond all reasonable doubt."
Mr Williams, a fitness enthusiast originally from Anglesey, was found in the bag in the bath at his flat in Pimlico on August 23, 2010.
Pathologists said he would have suffocated within three minutes if he was alive when he got inside the 32-inch by 19-inch holdall.
None of his DNA was found on the lock on the bag and his palm prints were not found on the rim of the bath.
However, Mr Hewitt said there was no evidence that the flat had been "deep-cleaned" to remove forensic traces and nothing to suggest a struggle or a break-in.
He said it was "beyond credibility" that the secret services had "pulled the wool" over his eyes.
"I do not believe that I have had the wool pulled over my eyes. I believe that what we are dealing with is a tragic unexplained death."
The family of Gareth Williams have said they are "naturally disappointed" it is not possible to state with certainty how the codebreaker died.
They said in a statement they back the coroner's verdict that Gareth was probably unlawfully killed over the latest police conclusions.
They said: "We consider that on the basis of the facts at present known the Coroner's verdict accurately reflects the circumstances of Gareth's death."
They added: "We still however remain very disappointed over the failure of his employers at MI6 to take even the most basic enquiries concerning Gareth's welfare when he failed to attend for work on the 16th August, 2010.
"We believe that if proper steps had been taken in the same manner as any reasonable employer would have undertaken further information relating to the cause of his death might have become apparent and not have been lost due to the length of time before Gareth's body was found."
Spy's family disagree with new police conclusion. They back coroner's view prob unlawfully killed. Again criticise MI6 failures after death
Reconsidering all the original evidence and following new lines of inquiry, police say there is still insufficient evidence to be definitive on the circumstances of Gareth Williams' death.
They say it is theoretically possible for a person to lock themselves in a bag with the sort of lock used.
There is no evidence to support the theory there was a forensic clean of fingerprints
There is no evidence of a third person in the flat
No evidence of forced entry
Police say they have had full support from security services and there is nothing to support the theory that Mr Williams' death was related to his work.
His interest in womens' clothes fuelled much speculation, they say, but the clothing had no bearing on the circumstances of his death.
Officers say Mr Williams was a very private person, who was close to his family and had few close friends. He was concientious and was a decent man with hobbies.
Police explained no evidence has been identified that could establish the full circumstances of Mr Williams' death beyond reasonable doubt.
They say, on balance, their probable conclusion is that no person was present when he died and there is insuffient new evidence to re-open an inquest.
There are no more active lines of inquiry but police say the case will remain under review.
Working at MI6 is not like James Bond, one of the security chiefs told MPs that operatives are given far more supervision.
"The idea of sending an agent off into the field like James Bond, then he comes back two months later and reports... that doesn't work that way," Sir John Sawers, chief of MI6, said. "Our people in the field will have constant communication with us."
Sir Malcolm Rifkind has said that security chiefs speaking to MPs in public today was "an historic occasion" that will be repeated.
The Chair of the Intelligence and Security Committee added that he believed those involved were glad of the chance to speak publicly.
He said: "Many of them have been upset at the accusations that they have been doing something improper or doing something unreasonable to their fellow citizens.
"I suspect they were pleased to have the opportunity in public to speak about the work their own staff do and how important it is to the national interest."
Britain's enemies are "rubbing their hands with glee" over whistleblower Edward Snowden's NSA leaks, the MI6 chief said.Read the full story ›
Just out of spy chiefs session. Felt key line the attack on Snowden leaks that Al Qaeda would be lapping up, enemies rubbing hands with glee
Spy chiefs clear they believe Snowden leaks & media coverage of it caused damage to their operations. Terrorists now changing communications
MI6 chief Sir John Sawers said the leaks from NSA whistleblower Edward Snowden "have been damaging and put operations at risk."
Al-Qaeda is "lapping up" the leaks and Britain's enemies are rubbing their hands with glee, the British intelligence chief added.
Asked if GCHQ could guarantee it does not operate beyond UK law, Sir Iain Lobban replied: "I can give you that guarantee. I believe that to be true. We are subject to the law."