Judge Renaud van Ruymbeke found there were no grounds for a trial over accusations of massive kickbacks after prosecutors cited a lack of evidence.

France led a seven-year inquiry into claims that illegal commissions were paid to politicians, military officers and middle men in Taiwan, China and France as part of 2.8-billion-dollar contract with Taiwan for six frigates.

French investigators wrapped up the probe in 2006, but complained they had been denied access by the government to top-secret defence files at the heart of the case.

State prosecutor Jean-Claude Marin in August requested that the case be dropped, saying the investigation had not "brought to light the existence of retro-commissions (kickbacks)."

The prosecutor said the probe had "not enabled the beneficiaries to be identified."

Taiwan's navy bought the six La Fayette-class frigates from French defence company Thomson-CSF (now called Thales).

A 2001 investigation by Taiwan's highest anti-graft body concluded that as much as 400 million dollars in kickbacks may have been paid throughout the course of the deal.

Thirteen military officers and 15 arms brokers in Taiwan were convicted of bribery and leaking military secrets in connection with the case and have been jailed.

In France, the scandal drew in a colourful cast of characters, including former foreign minister Roland Dumas, his then-mistress Christine Deviers-Joncour whom he later dubbed 'Mata Hari,' and Loik Le Floch-Prigent, flamboyant ex-head of then state oil giant Elf.

Although Elf was not officially involved in the deal, it paid Deviers-Joncour to convince Dumas to drop his opposition to the sale. The former minister had feared it would strain Paris' ties with Beijing.

The former minister, who was questioned in the case, claimed to know who received the alleged kickbacks, but accused governments of locking up documents that could have identified them.

Former finance ministers Laurent Fabius, Francis Mer and Thierry Breton invoked state secrecy laws to oppose the release of the documents sought by investigators.

Allegations of backhanders emerged after the body of the officer who ran the Taiwanese navy's weapons acquisitions office was found floating in the sea off the island's east coast in 1993.

Further suspicions arose when Swiss courts discovered 520 million dollars in accounts held by businessman Andrew Wang, the main suspect in the case.

Wang, dubbed "Mister Shampoo" for his supposed wizardry as a money launderer, was allegedly tasked with convincing Taiwan to buy the ships and renege on a nearly clinched deal with South Korea's Hyundai.

Taiwan is still seeking the return of the 520 million dollars held on Wang's Swiss accounts, but Switzerland in April rejected the request.

A total of 900 million dollars (in today's terms, 640 million euros) remain frozen by Swiss banks on suspicion they were bribes.

A Swiss court judgement concluded that bribes had been paid by Thomson-CSF to middlemen in the deal.

Chen, who left office in May, was sued by five retired officials for alleging in a 2005 television interview that they had taken 20 million dollars in kickbacks in connection with the controversial deal.

Taiwan is still seeking hundreds of millions of dollars (euros) in compensation and interest from France.

It argues that the under-the-table payments paid to ensure the deal went through were explicitly forbidden by the contract. The penalty clause in the contract stipulated reimbursement of the hidden payments.

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