Prosecutors have dropped the charges against a bricklayer accused of murdering 29 people in the 1998 Omagh bombing.

Seamus Daly, 45, had been on remand in prison since being charged with the Real IRA atrocity and a range of other terror offences in April 2014.

Seven years ago, Mr Daly was one of four men successfully sued for bombing the Co Tyrone market town when he was found liable for the attack in a landmark civil case taken by some of the bereaved families.

No-one has ever been convicted of the murders in a criminal court.

Mr Daly, from Co Armagh, has always denied involvement in the bombing which inflicted the greatest loss of life of any terror atrocity in the history of the Troubles.

The dead came from both sides of the border and from England and Spain.

The decision by the Northern Ireland Public Prosecution Service (PPS) comes before Mr Daly's case had even reached the floor of the Crown Court.

A pre-trial hearing commenced in Omagh Magistrates' Court last week to establish whether the evidence in the case was of sufficient strength to warrant such a trial.

That decision has now been taken out of District Judge Peter King's hands, as the PPS has withdrawn the charges before the preliminary hearing had reached conclusion.

A PPS lawyer officially withdrew the prosecution during a routine magistrate's hearing at Ballymena Courthouse, Co Antrim, this morning.

As well as the 29 murder counts, Mr Daly, from Kilnasaggart Road, Jonesborough, Co Armagh, had faced charges of causing the August 1998 explosion and possession of a bomb with intent to endanger life or property.

He was further charged with conspiring to cause an explosion and having explosives with intent in connection with a separate dissident republican bomb plot in Lisburn in April of the same year.

All charges were dropped this morning and Mr Daly was released from Maghaberry high-security prison shortly afterwards. 

In 2009, Mr Daly and three others were ordered to pay £1.6 million in damages to the bereaved relatives - money they are still pursuing.

Mr Daly faced a civil retrial after successfully appealing against the original finding, but the second trial delivered the same outcome as the first, with Mr Justice John Gillen ruling him responsible for the attack.

In 2007, south Armagh electrician Sean Hoey, who was then 38 and from Jonesborough, was found not guilty of the 29 murders after a marathon trial at Belfast Crown Court.

At the time, trial judge Mr Justice Weir heavily criticised the Royal Ulster Constabulary and its successor, the Police Service of Northern Ireland, for their handling of the investigation.

The decision to drop the case came after inconsistencies emerged in the evidence of a key prosecution witness, Kilkenny builder Denis O'Connor, during the pre-trial hearing.

His testimony had been subject to reporting restrictions until the charges were dropped.

A spokeswoman for the PPS said: "The decision not to seek the return of Seamus Daly for trial to the Crown Court has been taken following a careful review of the current state of the evidence.

"This has focused in particular on the testimony provided by a key witness during committal proceedings last week.

"Under cross-examination a number of issues became apparent which impacted upon the reliability of the evidence that the witness was providing.

"Having conducted a careful review of the case with the prosecution team, the Director of Public Prosecutions Barra McGrory QC has concluded that the available evidence no longer provides a reasonable prospect of a conviction. Consequently the prosecution cannot be continued."

The spokeswoman added: "On behalf of the PPS, I extend our sympathy to the families affected by the Omagh bomb.

"We understand how difficult this decision will be for them. We hope they are assured that this decision was not taken lightly but is required in accordance with our duty as prosecutors to keep a decision under review and to discontinue criminal proceedings when the Test for Prosecution is no longer met."

Victims' campaigner agrees with decision to drop trial

A victims' campaigner whose son was killed in the blast has said he agreed with the decision to drop the trial.

Michael Gallagher said: "This was a difficult case and hinged on the testimony of one individual and that one individual did not seem to be up to meeting the test needed to put someone behind bars.

"For that reason I agree with the decision, regrettably, that happened today.

"There was no other option for the Public Prosecution Service or the judge but to deliver the verdict that we have just heard."

Speaking on RTÉ News at One, Mr Gallagher said he hoped the Taoiseach would meet with the group and support their call for a full cross-border inquiry.

He added that Enda Kenny said he would meet with the group once the Daly trial was over. 

Earlier, Mr Gallagher said he was unhappy that information was circulating this morning about the collapse of the case, yet he and other families had not been informed by the authorities.