The Metropolitan Police probe, called Operation Midland, was launched in November 2014 after claims that boys were sexually abused by a number of public figures more than 30 years ago.
It cost €2.3m up to November 2015 and did not lead to a single arrest, but saw raids on the homes of 92-year-old D-Day veteran Edwin Bramall and the late Leon Brittan.
Ex-Tory MP Harvey Proctor, who furiously denied any involvement, was interviewed under caution twice and had his home searched but has now been told he will face no further action.
Late former prime minister Edward Heath was also named in connection with the inquiry.
Defending the investigation, Scotland Yard Deputy Assistant Commissioner Steve Rodhouse said: “It is absolutely right that we assessed carefully the allegations made to us in October 2014 and did not dismiss them prematurely.
“Our initial inquiries supported the need for a thorough investigation to seek any evidence that might corroborate or disprove the allegations.”
In a statement, the force said it “will not apologise for carrying out its duty to investigate serious allegations of non-recent abuse”.