Former far-right Freedom Party leader Joerg Haider has been cleared over accusations that he bribed police officers and tax officials.
It was alleged that he paid for damaging information on political rivals.
Senior prosecutor Friedrich Schindler said the one piece of evidence against Haider - an incriminating letter - had proved to be a forgery.
He said the other allegations had proven "too thin" on which to base an investigation.
Haider said: "I always knew this smear campaign that originated in the minds of a few sick individuals would collapse on itself, as it has."
The case is still on going against other Austrian politicians including the Freedom Party's Vienna party boss Hilmar Kabas.