Mark Saunders died in a hail of gunfire after shooting at police and neighbours’ houses.
The 32-year-old lawyer was besieged by police at his £2.2million home in Chelsea, west London.
Since the tragedy in May last year, there have been concerns that police did not need to use lethal force. The Crown Prosecution Service considered the case after an inquiry by the Independent Police Complaints Commission.
Yesterday Sally Walsh, of the CPS, said: “There is insufficient evidence to charge any officer in relation to these sad events. All of the firearms officers have stated they were acting in self-defence or in defence of colleagues.
“It would be for the prosecution to prove any officer was not acting in self-defence or defence of his fellow officers.”
She added: “I have decided there is no realistic prospect of proving this beyond reasonable doubt.”
Mr Saunders’ widow Elizabeth said an inquest would now examine why police thought it necessary to use lethal force.