Ms Gun, a former translator for GCHQ, the security service's main monitoring centre, had been accused of leaking a memo to a newspaper on an alleged American "dirty tricks" campaign to spy on UN delegates ahead of the Iraq war.

Outside the Old Bailey today Ms Gun, 29, said she was "absolutely delighted and extremely relieved" at being cleared but said: "I would like to know why they charged me and then four months later decided to drop it."

She said: "I have no regrets and would do it again."

During today's hearing, the charge was formally put to her that between January 30 and March 2 last year she disclosed information relating to security or intelligence contrary to the Official Secrets Act of 1989.

Then after she pleaded not guilty, prosecutor Mark Ellison told the court the case would not go ahead. He said: "The prosecution offer no evidence against the defendant on this indictment as there is no longer sufficient evidence for a realistic prospect of conviction. It would not be appropriate to go into the reasons for this decision."

Ms Gun, of Cheltenham, Gloucestershire, had been accused of disclosing a request allegedly from a US national security agency official for help from British intelligence to tap the telephones of UN security council delegates during the period of fraught diplomacy before the war.

She argued the alleged disclosures exposed serious wrongdoing by the US and could have helped to prevent the deaths of Iraqis and British forces in an "illegal war".

After the prosecution offered no evidence, the judge, the Recorder of London Michael Hyam, recorded a formal verdict of not guilty.

Then Ben Emmerson QC, representing Ms Gun, demanded an explanation from the prosecution of why, after such a length of time, they had now decided to drop the charge. Mr Ellison refused to say.

A full trial could have generated unwelcome publicity for the government and GCHQ, where she had worked until she was sacked in June last year. She was charged in November on an unconditional bail.

For her defence, she had planned to seek the disclosure of the full advice from the attorney general, Lord Goldsmith, on the legality of the war against Iraq, which could have been potentially damaging and embarrassing for the government.

The Guardian reported on Friday that the case against her would collapse. In court, Mr Emmerson told the judge the first issue requiring examination was "whether, by whom and why the decision was leaked to the Guardian six days before it was communicated to the defence. If a decision was made last Friday, why was it not communicated to the defence and if it had not been taken last Friday, what has happened in between?"

He pointed out that eight months had elapsed between Ms Gun's arrest and the decision to charge her, and another three months since she was actually charged.

"Katharine Gun is entitled to know - and perhaps more importantly, the public are entitled to know."

Mr Ellison replied: "You will understand that consideration had been given to what is appropriate for the crown to say. It is not appropriate to give further reasons. I am reluctant to go further than that unless the court requires I do."

The judge asked whether there was "any form of inquiry which I would be entitled to make?"

He was told by Mr Ellison that apart from making an order for the defence costs, there was not - as the crown had offered no evidence. Outside court, Barry Hugill, a spokesman for human rights group Liberty, said: "Why have they waited until today? Why has she been put through eight months of hell?"

Ms Gun has recently attracted the support of Hollywood actors including Sean Penn. He told the Observer at the Bafta awards: "It was a decision of conscience in a world where nobody celebrates that. She will go down in history as a hero of the human spirit. I urge the whole world to angle their eyes in the direction of that courtroom."

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