Police said on Monday there was no evidence that journalists from Rupert Murdoch's News of the World tabloid had deleted a murdered schoolgirl's mobile phone messages, a claim that led to public revulsion and the closure of the paper.
It was a report last July that the paper's journalists had deleted voicemails on the phone of Milly Dowler in 2002, giving her parents false hope she was still alive, that lit a fire under a simmering scandal over phone hacking.
In the ensuing outcry, Murdoch shut the 165-year-old News of the World, dropped a $12 billion bid for satellite broadcaster BSkyB, and personally donated 1 million pounds to charities nominated by the Dowler family.
News International, the British arm of his News Corp media group, paid the family a further 2 million pounds as Murdoch called the paper's behaviour towards them abhorrent.
Britain's media industry, politicians and police have been rocked by revelations that the paper's journalists and private investigators illegally intercepted voicemail on a large scale.
Prime Minister David Cameron set up an inquiry into newspaper practices, headed by senior judge Brian Leveson.
On Monday the inquiry was told that, although it was clear that the News of the World had hacked Milly Dowler's phone, it was unlikely it was responsible for deleting her messages.
The most likely explanation was that the voicemails had been automatically removed after a 72-hour limit, said Neil Garnham, a lawyer for London's Metropolitan Police Service (MPS).
He said that Glenn Mulcaire, a detective working for the News of the World who was jailed for phone hacking in 2007, had not been assigned by the paper to the Dowler case until after the messages were deleted in March 2002.
It is conceivable that other News International journalists deleted the voicemails. But the MPS has no evidence to support that proposition, and current inquiries suggest it is unlikely, Garnham said.
David Sherborne, a lawyer representing the Dowlers and other victims of press intrusion, said the police statement does not mean that no one else at News International was responsible by another means of accessing those voicemails in that time.
He said another News International journalist, whom he declined to name, had also had the girl's phone number and access code.
Nick Davies, the journalist who first revealed the Dowler phone hacking in the Guardian newspaper last July, told Sky News the key point of the story remained unchanged -- that the News of the World had intercepted a murdered girl's phone.
I agree that the deletion was an important element, it did have an emotional impact, he said.
But it was not the whole story ... it is delusional to try to pretend that the new evidence on the one point of this story would have changed the outcome.
Separately, former culture minister Tessa Jowell became the latest individual to receive a settlement from News International over the hacking of her phone.
Jowell accepted 200,000 pounds in damages, her lawyers said.
Earlier at the inquiry, the former chief reporter on the News of the World defended a story alleging that soccer star David Beckham had had an affair.
Neville Thurlbeck said there had been a public interest in exposing the alleged infidelity because Beckham and his wife Victoria had projected a fairy-tale marriage to the public in order to sell products.
Beckham at the time denied the allegation.
(Additional reporting by Georgina Prodhan and Michael Holden; Editing by Kevin Liffey)