Prince Harry’s lawyers informed the court on Friday morning that he was “discontinuing” his case.
The development came just hours before he was due to hand over relevant documents to the High Court.
The duke believes that in pursuing the claim, he would have given “a continued platform to the Mail’s false claims” made two years ago.
His focus is said to remain on the judicial review brought against the Home Office — heard by the High Court last year — as well as on the “safety of his family”.
Despite withdrawing his claim, the duke maintains the Mail on Sunday’s assertion that he had offered to cover the cost of his security only after launching judicial review proceedings was “false”.
His spokesman said it was “now widely known” that he first offered to pay for state security at the so-called Sandringham summit in January 2020, a position he has maintained since.
They said the newspaper’s “honest opinion” defence was surprising, given it was not labelled as an opinion piece and was published in the news section.
The spokesman said costs were yet to be determined.
Having admitted defeat, the duke will have to pay the newspaper’s costs of £250,000 along with his own lawyers’ fees.
In January last year, the court heard that costs of £340,000 had already been incurred by the duke. He estimated the total cost, if the case went to trial, would have set him back £1.2m.
The Duke’s legal firm, Schillings, informed Associated Newspapers Limited at 10.06am on Friday that it had filed a notice with the court stating: “The Duke of Sussex discontinues all of this claim.”
He had sued ANL over an article published in February 2022, about his legal battle with the Home Office concerning his security.
It said he had tried to keep “secret” parts of the fight and had attempted to “spin” the dispute in his favour by claiming he had offered to pay for police protection.
ANL argued the story expressed an “honest opinion” and did not cause the royal “serious harm”.
Last month, the duke lost a bid to have the newspaper’s “honest opinion” defence thrown out.
Justice Nicklin ruled the publisher had a “real prospect of demonstrating that an honest person could have held the view” that a statement released by the duke’s representatives was “a masterclass in the art of spinning”.
The judge ruled then that Harry must pay the £48,447 legal costs incurred by ANL in relation to that “summary judgment application” by December 29.
As the claim progressed, each side was obliged to disclose any documents considered “relevant”, even if potentially harmful to their case. The deadline for submitting those was Friday.
Meanwhile, the duke is bringing separate legal proceedings against the Home Office after being told he was no longer automatically entitled to personal protective security when visiting from the United States.