The three-year investigation into the shooting of James Ashley has cost £5 million and resulted in five unsuccessful prosecutions.

The lengthy, laborious and expensive legal process was shrouded in secrecy and has been called a farce. Home Secretary Jack Straw is said to be deeply unhappy over the delays.

The officers may have been cleared of acting with criminal intent but the James Ashley matter is far from closed.

There are still disciplinary hearings to come and the police officers, who have had the case hanging over the heads for several years, are considering civil action to compensate them for the "punishment".

The family of James Ashley, angry no one is being brought to justice for his death, plans to sue Sussex Police.

Many questions over the way the force operates were raised during the trials. Sussex police were described as displaying "corporate incompetence" and "fundamental failures".

The way complaints against the police are handled has also been severely criticised.

Yesterday, at Wolverhampton Crown Court, Superintendent Christopher Burton, 44, Acting Chief Inspector Kevin French, 48, and Detective Inspector Christopher Siggs, 42, were formally acquitted of misconduct in office following the raid at a flat in Western Road, St Leonards, on January 15, 1998, which led to the shooting of suspected drug dealer James Ashley, 39, who was naked and unarmed.

Nigel Sweeney QC, prosecuting, said the Crown believed there was no realistic prospect of securing convictions against the three officers and offered no evidence.

He said: "In our view, recent events mean that there is no longer a realistic prospect of conviction in this case and that there is nothing that can be done to restore such a prospect. Accordingly, although we are deeply conscious of the pain and frustration this will cause to the family and friends of James Ashley, it's our duty to face up to that reality."

Finding the three officers not guilty, Mrs Justice Rafferty said Sussex Police still bore a "heavy burden" over the fatal shooting.

Ashley, described in court as a "violent, dangerous and ruthless drugs dealer", was naked in bed with his girlfriend when officers burst in.

He was shot by marksman PC Christopher Sherwood, a member of Sussex Police Special Operations Unit, who always claimed he believed Ashley was coming at him with a gun and he fired in self-defence.

PC Sherwood was cleared of murder earlier this month when his trial was halted at the end of the prosecution case when the judge ruled there was no evidence on which the jury could convict.

He became only the second British police officer to be charged with murder and an alternative allegation of manslaughter.

Last month PC Robert Shoesmith was acquitted of misuse of public office after the prosecution offered no evidence at the Old Bailey.

Legal restrictions stopping the trials being fully reported were yesterday lifted.

The collapse of the trials and the phenomenal cost of the investigations has led to harsh criticism of the Crown Prosecution Service and questions over why the case was brought in the first place.

In a statement, the CPS said yesterday: "The decision to prosecute was made after lengthy consideration by the service and the prosecution counsel and, of course, the case was successfully argued before the district judge.

"What has changed is that continual review of the evidence has now persuaded counsel that it would be wrong to put this case before a jury. Hence, we offered no evidence."

After the raid, Kent Police were called in to investigate the alleged criminal aspects of the shooting while the now retired Chief Constable of Hampshire, Sir John Hodinott, looked at the actions of Sussex Police's senior officers.

The Kent inquiry, codenamed Moonstone, was headed by its then Assistant Chief Constable Barbara Wilding, who has since been appointed to the Metropolitan Police.

Insiders estimate the investigation alone cost more than £2 million with the costs of a series of court hearings adding £8,800 a day to the bill. To add to the cost, two high-ranking officers travelled to New Zealand to interview a retired Sussex officer who kept observation during the police raid.

The investigation has led to a deep rift between Sussex and Kent officers.

The report from Kent Police was kept secret but was known to be highly critical of the way the armed raid was conducted. It maintained there was insufficient intelligence to warrant the armed operation but the court findings now call into question the whole basis of the report.

Sussex Police officers said the report stained the reputation of the force and complained about the way they had been treated.

One insider said: "Those involved were left for five hours in a room, waiting to be interviewed. Some still had blood on them. The Kent officers never showed up and we learned later they had gone to the scene of the shooting."

The Wilding report was never made public yet it is thought to have formed the basis of the case against PC Sherwood.

Outside court yesterday, Mrs Wilding, said: "The extent of the fundamental failures in Sussex Police, described in detail by the Crown and endorsed by the judge, has resulted in the current situation where it is impossible to prosecute in these circumstances."

Sussex chief constable Paul Whitehouse, who was suspended for three weeks by Sussex Police Authority for statements he made in the wake of the shooting, yesterday praised the work done by his officers.

He said: "Of course there are many lessons to be learnt for ourselves and for the police service from the events of January 15, 1998, and this is a continuing process.

"But I ask people to bear in mind that the police operation mounted in Hastings that night was part of our unceasing effort to tackle serious crime and drugs issues on behalf of the people of Sussex.

"It only compounds the tragedy if such events as this are allowed to undermine confidence in Sussex Police, of the public in its police service and of officers and staff in the organisation they serve. This must not be allowed to happen."

In an email message to all Sussex officers yesterday Mr Whitehouse paid tribute to the "bravery" and "dedication" of officers.

Margaret Johnson, chairman of Sussex Police Authority, said there was relief after the officers were cleared but many issues had been raised.

She said: "The authority shares the relief of all the officers, their families and colleagues who have been involved in this case, that the criminal charges have finally been dismissed and that a not guilty verdict has been entered in each case.

"The Sussex Police Authority has long been concerned about the length of time that the due process has taken. There are a number of outstanding issues still to be addressed and you will appreciate that until such time as those outstanding issues are resolved, we are not in a position to say too much at this time."

Only one officer is now left in limbo following the collapse of yesterday's trial. Mr Whitehouse's deputy, Mark Jordan, has been suspended for three years from his £80,000 a year position. He is still waiting for a disciplinary hearing over the part he played in the armed raid.

The precise nature of the allegations against him have still not been disclosed.

He was suspended by Sussex Police Authority after accusations he authorised the release of firearms for the Ashley operation when there was insufficient evidence, which he has denied.

His case is scheduled to be heard on January 7. Close friends say he intends to return to work if he is vindicated despite his long absence from the force.

PC Chris Sherwood's suspension has also been lifted and he is now considering whether or not to return to his job.

An insider said: "He has lost the most productive years of his life and he will never get them back.

"Years have gone by and at huge expense. There is no proper independent review of cases to stop them in their tracks. Our system allows them to go on and on."

He said the officers were reluctant to speak openly because an inquest into Ashley's death had not been held.

Sussex Police came in for harsh criticism in court yesterday. Mr Sweeney spoke of "corporate failings" by the force.

Mrs Justice Rafferty said the family of James Ashley had been caused misery but acted with dignity throughout the hearings.

She said: "Those within Sussex Police who are viewed as responsible for the implementation, monitoring and good practice of firearms procedures bear a heavy burden."

Sussex Police is now facing the prospect of being sued by James Ashley's two children.

Their solicitor, Brian Jackson, said the children would be fighting for compensation for the loss of their father.

Mr Jackson said: "The family of James Ashley hoped those responsible for his death would be successfully prosecuted.

"Their hopes, and faith in justice, have been cruelly dashed. People will be left bewildered by this, as are the children of the deceased. Mr Ashley's children are now pursuing a negligence case against Sussex Police to obtain compensation for the tragic loss of their father."

Outside court the dead man's brother Tony, an insolvency officer for Customs and Excise, said: "We felt like we were the accused."

The 32-year-old, from Liverpool, added: "We reject the suggestion by the judge that he was into drugs. We have been fighting this for three-and-a-half years and we have not got justice."

James Ashley's sister, Pauline, 38, from Liverpool, said: "We still mourn the unacceptable and unnecessary loss of a much-loved son and brother.

"We feel it is our right to emphasise the real victim in this case is James Ashley. We call on the Home Secretary to initiate an independent review into the appalling standards of policing in Sussex."

The legal chapter on the death of James Ashley may now be finally reaching its conclusion. But the effect on his family and the officers involved and the questions raised about how the legal system works will continue.

A Sussex Police spokesman said the James Ashley case would "run and run".

He said: "The incident has certainly rocked those involved."