Seven men accused of burning a copy of the Koran in a Gateshead pub car park will face no further action.
The men were detained in September after a video appeared on the internet.
The Crown Prosecution Service (CPS) said there was not sufficient evidence for a realistic chance of conviction.
It said it had looked at a number of areas for possible prosecution but there was insufficient evidence. However, if any new evidence came to light it would be looked at, it said.
Northumbria Chief Crown Prosecutor Wendy Williams said: "This was a serious incident which the vast majority people will rightly find repugnant.
"However, no matter how unacceptable people may find such behaviour, we can only prosecute if there is sufficient evidence for a realistic prospect of conviction."
The CPS said it could not identify who had recorded and posted the video online, there was no evidence threatening behaviour was used and there was no evidence anyone present was upset by what they saw.
She said: "For these reasons we have decided that no-one should be prosecuted for an offence arising out of this incident, based on the evidence provided to us.
"If any further evidence comes to light and is sent to us, we will look at it.
"I must stress that our policy is to prosecute racist and religious crime fairly, firmly and robustly, but this can be done only in cases where there is sufficient evidence for a realistic prospect of conviction."
I would guess the CPS and police didn't want massive EDL protests during any trial . Politics is a numbers game if these lads had been BNP , NF , B&H or whatever they would in my opinion have been prosectuted because the authorities know we would probably just sit back and take it .