The brother of Saad al-Hilli, a British-Iraqi man mysteriously killed with his family in the French Alps in 2012, has been released from bail.

No further action will be taken against Zaid al-Hilli, who was arrested in June last year on suspicion of conspiracy to commit murder.

The 54-year-old had his bail cancelled because there was not enough evidence to charge him with any criminal offence, Surrey Police said in a statement.

Saad al-Hilli was shot dead along with his wife and her mother in September 2012 in a woodland car park close to the village of Chevaline, in the hills above Lake Annecy in southeast France.

His two daughters, aged seven and four at the time, survived the attack, but French cyclist Sylvain Mollier, apparently an innocent bystander, was also killed.

The Hilli family lived in the Surrey village of Claygate, a suburb outside London.

Zaid al-Hilli, who lives in nearby Chessington, had publicly protested his innocence, accusing French investigators of a cover-up.

Surrey Police did not identify Zaid al-Hilli by name, only referring to a 54-year-old man from Chessington.

"This remains a French-led investigation and officers from the Surrey and Sussex major crime team continue to work closely with the French authorities," the statement said.

"We have carried out exhaustive enquiries in the UK on a number of active lines of enquiry."