The family of murdered Co Derry GAA official Sean Brown has been told the British government will not establish a public inquiry into the killing.
The decision comes six months after a Coroner wrote to the Secretary of State for Northern Ireland requesting a public inquiry, and the PSNI said it would not stand in the way of the request.
A letter confirming the decision by Hilary Benn was emailed to solicitors acting for the family a short time ago.
Niall Murphy of KRW Winters and Co said they are "devastated" by the news.
Mr Brown was chairman of Bellaghy Wolfe Tones GAA in south Derry and was locking up the gates of his club when he was assaulted, abducted and murdered by a loyalist gang in May 1997.
The 61-year-old father of six was taken to a remote country lane outside Randalstown and shot six times.
No one has ever been convicted of his murder, which was carried out by the Loyalist Volunteer Force, a breakaway faction of the UVF.
His family has alleged that agents working for RUC Special Branch were involved in the killing and that the investigation was deliberately hindered in order to protect them.
An inquest into the murder heard startling evidence that appeared to substantiate that claim.
It was revealed that 25 people, including state agents, had been linked by intelligence to Mr Brown's murder.
Surveillance on a key suspect was suspended the night before the murder and reinstated the following day.
The actions of state agencies during the inquest hearings also strongly suggested there may be something to hide. The PSNI, the UK's Ministry of Defence and the British security service MI5 all made applications asking for intelligence material to be withheld.
When a 52-page intelligence file was eventually made available to the Brown family, lawyers say every single word was blacked out, meaning they could not read anything.
"This is the legal mechanism by which the state keeps its secrets," solicitor Niall Murphy told an RTÉ documentary about the murder in April.
The inquest came to a sudden halt on 14 March because it was not possible for it to sit in closed hearings to incorporate the large volume of intelligence material.
Coronor Mr Justice Kinney said his duty to carry out a "full, fair and fearless" investigation into Mr Brown's murder would be "seriously compromised".
He announced that he was writing to the Secretary of State for Northern Ireland at the time, Chris Heaton-Harris, requesting a public inquiry.
The PSNI has said it would not stand in the way of a request for a public inquiry into the murder.
A judge at the High Court in Belfast last week gave Northern Secretary Hilary Benn until 5pm today to inform Mr Brown's family whether the UK government will order a public inquiry.
The letter from Mr Benn stated: "After due consideration, I have concluded that an inquiry under the Inquiries Act is not the best way to proceed."
The Northern Secretary said he believes the Independent Commission for Reconciliation and
Information Recovery (ICRIR) is capable of discharging the Government's human rights obligations in the case, but that has been rejected by the family.
Mr Benn added: "While I recognise that this decision will come as a disappointment to Mrs Brown and her family, I would like to assure you that it is a decision that has been carefully made in full consideration of the facts available to me as Secretary of State for Northern Ireland."
On Wednesday of this week, Mr Benn announced that a public inquiry will be held into the murder of solicitor Pat Finucane, who was shot dead in front of his wife and three young children in their family home in north Belfast in February 1989.
Explaining the decision to do so, he told the House of Commons there were "exceptional circumstances" because two previous British government commitments to the family to hold a public inquiry had not been fulfilled.
Family to consider legal options
A solicitor for the family said they are "devastated" by the news and will now consider their legal options.
"It flies in the face of a direction by a High Court judge," said Niall Murphy of KRW Law.
"We must remind ourselves that a High Court judge has read all of the sensitive material in its unredacted and raw form, he was of the view that an inquest could not proceed and that the only mechanism to discharge the state's international obligations was a public inquiry."
