Lord Janner will not face charges after an investigation into “extremely serious” allegations of historic child abuse, the Crown Prosecution Service has said.
Alison Saunders, the director of public prosecutions, said the Jewish peer was not well enough to stand trial.
He has repeatedly denied any wrongdoing and his lawyers and family today said he was "a man of great integrity and high repute with a long and unblemished record of public service".
In a statement, Ms Saunders said: “The CPS has concluded that Lord Greville Janner should not be prosecuted because of the severity of his dementia which means he is not fit to take part in any proceedings, there is no treatment for his condition, and there is no current or future risk of offending.”
The CPS said it had carefully considered whether to make a statement in the case following heightened public interest and suggestions of a “cover-up”.
“The allegations that have been made against Lord Janner are extremely serious. Those who have made them are, entirely understandably, vociferous in urging the taking of action against Lord Janner,” the statement said.
The CPS added that it was “in no sense deciding or implying that the allegations that have been made are established or that Lord Janner is guilty of any offence”.
More than a dozen people had made allegations to police relating to the peer, the majority of whom were vulnerable residents of Leicestershire children’s homes between 1970 and the late 1980s.
It was claimed he had befriended the manager of a home in order to abuse children under its care.
The CPS said Lord Janner should have been charged in the past. It believed the “evidential test” had been passed on the basis of testimony from nine individuals.
The evidence would have been sufficient to charge him with more than 20 counts of indecent assault and sexual abuse, including of boys under the age of 16, between 1969 and 1988.
The CPS statement said: “Had the previous decisions been to prosecute, as they should have been, Lord Janner would have had the opportunity to challenge the evidence and defend himself through the trial process, with a jury ultimately deciding on his guilt or innocence some years ago.”
Four medical experts had examined Lord Janner in recent months and concluded his dementia was too severe for him to stand trial.
Police had submitted evidence to the CPS a year ago for consideration.
It is understood officers had interviewed around 20 men who claimed they were abused by Lord Janner more than 20 years ago. He strongly denied the allegations when they first surfaced at that time.
A property owned by Lord Janner was searched in December 2013 as part of an “ongoing criminal inquiry”.
Officers spent two days at the apartment in north-west London. Lord Janner, who is in poor health, was not arrested or interviewed at that time and his lawyers had said the 86-year-old was helping police with the investigation.
Greville Janner QC, Lord Janner of Braunstone, was Labour MP for Leicester West for 27 years before stepping down in 1997. The father-of-three is founding patron of the Holocaust Education Trust.
He held a number of leading positions on groups serving world Jewry and is a former president of the Board of Deputies.
The investigation had been linked publicly to the case of one of the country's most notorious convicted paedophiles. Frank Beck was given five life sentences in 1991 for sexually abusing boys and girls. Beck, a former Liberal councillor and head of three children's homes in Leicestershire, died in 1994.
During Beck's three-month trial, a witness claimed he had been abused by Lord Janner. The politician denied any wrongdoing and addressed the allegations in Parliament himself in December 1991, weeks after Beck's conviction.
He told MPs he had known the witness, Paul Winston, and tried to help him but claimed Beck and Winston had conspired against him in an attempt to derail the investigation into Beck.
Leicestershire Police said on Thursday that it was disappointed by the "wrong" decision not to prosecute Lord Janner.
Assistant Chief Constable Roger Bannister said: "Thanks primarily to the courage of 25 victims who have made a complaint and the complete professionalism of the investigation team, we have built a case that the DPP has acknowledged is the result of a thorough investigation, evidentially sufficient and gives rise to a realistic chance of conviction.
“There is credible evidence that this man carried out some of the most serious sexual crimes imaginable over three decades against children who were highly vulnerable and the majority of whom were in care.
“I am extremely worried about the impact the decision not to prosecute him will have on those people, and more widely I am worried about the message this decision sends out to others , both past and present, who have suffered and are suffering sexual abuse."
He suggested the force might make a legal challenge to the CPS decision.
In a statement, Lord Janner's lawyers said the peer was "a man of great integrity and high repute with a long and unblemished record of public service. He is entirely innocent of any wrongdoing.
“As the CPS indicated today, this decision does not mean or imply that any of the allegations that have been made are established or that Lord Janner is guilty of any offence.”