A £1 million murder inquiry has been abandoned with no prospect of the killer being brought to justice.

Sussex Police confirmed today that the murder of millionaire businessman Richard Watson was no longer under active investigation.

A force spokesman said: "It will always be revisited in the light of any new evidence.

"But following a study of the case papers by the Crown Prosecution Service (CPS), they have advised that they will not be taking any further action. Sussex Police have now informed all the parties involved."

Mr Watson's family is said to be distressed and disappointed by the news.

His widow, Linda, is reported to have said: "I have no faith in Sussex Police at all."

Mr Watson, a 55-year-old computer tycoon, was gunned down outside his luxury farmhouse in East Grinstead in 1996 in an apparent contract killing.

The police investigation was highly criticized after Mr Watson's widow and stepdaughter were tried and acquitted of the crime when the case collapsed.

In 2000, detectives questioned a convicted hitman in connection with the shooting and a second major investigating was launched.

Gary Perry, Sussex CPS chief prosecutor, said: "I looked at the evidence carefully on the basis of whether there was sufficient for a realistic prospect of conviction, and of the admissible evidence available to me I am afraid there was simply not enough evidence to mount a prosecution."

This is the second murder investigation in Sussex in recent years which has failed.

No one has been tried for the murder of Jay Abatan, who was punched in a row over a taxi and hit his head on the ground outside the Ocean Rooms night club in Morley Street, Brighton, in 1999.

That inquiry cost more than £2 million.