Rudd, 60, appeared in court on Thursday after police raided his Tauranga home. He was accused of attempting to hire a man to kill two others, and of threatening to kill. He is also facing charges of possessing cannabis and methamphetamine.
However, yesterday the most serious charge was withdrawn by Tauranga Crown Solicitor Greg Hollister-Jones. He said after reviewing the police file, there was "insufficient evidence to proceed" with the attempting to procure charge.
Rudd's lawyer, Paul Mabey, QC, lambasted police for laying the charge in the first place, saying it had attracted "extremely damaging" worldwide publicity.
"The charge should never have been laid. The Crown Solicitor's opinion was not sought. The charge is now withdrawn - within 24 hours of Mr Rudd's first appearance in court," Mr Mabey said.
"Mr Rudd has suffered unnecessary and extremely damaging publicity as a result of widespread and sensational reporting of a very serious allegation, which on any basis was never justified."
Police refused to comment on the case, other than to say that once a charge is laid, the Crown Solicitor "becomes responsible for the prosecution".
Crown Law spokeswoman Jan Fulstow said the laying of the charge "was a matter for police".
"The police do not have to come to the Crown to seek permission to lay charges. The police make decisions on charges having regard for the evidence that they have."
However, Mr Mabey questioned the police decision to charge without consulting the Crown.
"The damage to Mr Rudd is incalculable. Questions arise as to the degree of care taken by those responsible for arresting and charging him with attempting to procure murder.
"Citizens are entitled to a responsible exercise of the power to charge which, as is proved here, can give rise to potentially irreversible damage if that power is not exercised responsibly. Mr Rudd is considering any possible remedies he may have."
Mr Mansfield said it was unusual that police did not seek advice on the charge, given its serious nature and who the individual was.
"Unless there was urgency which involved the individual or public safety, then given the relative novel nature of the charge and his public profile both nationally and internationally, it was, at the very least, naive of the police not to seek advice."
He said the move could be seen as negligent and Rudd could take civil action which would be costly but the remedy would be "worthwhile".
Queen's Counsel Paul Wicks said that in hindsight, police could have held off on the most serious charge, using the lesser allegations to put Rudd before the courts while they sought advice from the Crown.
Auckland University criminal law and defence expert Professor Warren Brookbanks thought it was "highly unlikely" that any action by Rudd against police would succeed.
"Charging decisions are reviewed, amended or withdrawn all the time," he said. "It's part of the function of a healthy prosecutorial system."
If a case was complex or difficult police could seek advice from the Crown but that was "a discretionary exercise ... not mandatory".
There were, however, a number of offences that could be prosecuted only with the consent of the Attorney-General, Professor Brookbanks said. The offence of counselling or attempting to procure murder was not one of them.
A passion for fast cars, women and rock and roll
He's known for his love of women, fast cars, big spending and rock and roll.
Yet some of those closest to Phil Rudd, the AC/DC drummer who now faces two drugs charges and another of threatening to kill, have described a man often far removed from an outgoing rock star.
Rudd appears on the balcony of his house to dismiss the media. Photo / John Borren
Yesterday, the 60-year-old remained on bail at his upmarket beachfront home in Tauranga as security guards stood out front.
Rudd remained silent, but his lawyer said he was considering "possible remedies" for reputational damage following a now-withdrawn charge of attempting to procure the murder of two men.
After being told of the dramatic backdown by authorities, the man named in court documents as the intended hit man said he was pleased for Rudd.
He told the Weekend Herald he believed the matter had been blown out of proportion and that Rudd may have been blowing "hot air" when it came to any talk of a hit job.
While he did not go into detail over the police charges, he said he saw himself as a "family man" - not a hit man. His relationship with Rudd involved working girls - sometimes several would be hired at a time - and what the rock star paid could roll into the tens of thousands.
A source close to Rudd said the drummer was known at one Tauranga brothel, whose manager yesterday would say only that she was aware of the interest in the club and the allegations against Rudd.
Rudd was also known around town for his expensive cars - which he occasionally wheeled out for a good cause.
Following the 2011 Christchurch earthquake, Rudd put his luxury vehicles on display, including a Ferrari 599, Lamborghini Murcielago, Lamborghini Gallardo, 2010 Rolls-Royce Ghost and a unique Can-Am.
He was a fan of racing - he provided the wheels for a Tauranga team that entered the New Zealand V8 Touring Car champs in 2003 - while an associate said Rudd had been known to hit the track himself at the Taupo Motorsport Park.
Rudd was reportedly also a fan of boxing, a sport son Jack had taken up.
"Aside from that, he's a guy who loved getting out to his shed just like everyone else - banging and crashing and welding and cutting and making stuff."
Even when not on the road with AC/DC, Rudd indulged his passion for music.
His locally-based Mountain Recording Studios was incorporated soon after Rudd arrived in Tauranga in the 1980s, and in September, about 150 people turned out for the launch party of his 11-track solo album, Head Job, at his restaurant, Phil's Place.
At the time the marina-side restaurant opened in 2011, Rudd told the Bay of Plenty Times he had furnished its bar with fine champagne and whiskies chosen from "the best distilleries in the world".
He loved his adopted city because everything was in reach - his launch in the marina, his helicopter and hangar at Tauranga Airport.
People accepted him and were not "overawed by success".
But a close associate said of Rudd yesterday: "He's done amazing things, but he can't see that he's done amazing things, and he feels like he's never been given credit for what he's accomplished."
One former employee said the threatening to kill allegations against Rudd were bizarre and "uncharacteristic".
"He's an awesome guy, I've never had a problem with him."
