Germany is dropping its pursuit of a ban on the Church of Scientology after finding insufficient evidence of illegal activity.
However, domestic intelligence services will continue to monitor the group, security officials meeting in Postdam said Friday.
The German branch of the Los Angeles-based Church of Scientology has been under observation by domestic intelligence services for more than a decade.
It first set up in Germany in 1970 and officials estimate it has 5,000 to 6,000 members in 20 centres across the country.
Security officials had asked state governments almost a year ago to begin gathering information on whether they had sufficient grounds to seek a ban.
Although the charges were severe, including conflict with Germany's constitution and denial of basic human rights, racism and other abuses, the 16 German states ruled there was not enough evidence to support a ban.
Church welcomes decision
The Church of Scientology welcomed the government's decision.
"There never was a legal basis to open such proceedings," said Sabine Weber, a spokeswoman for Scientology in Germany, calling on officials to end "the discrimination and the harassment that go along with it."
Germany has maintained that it considers Scientology to be in conflict with the principles of the country's constitution, calling it less a church and more of a business that uses coercion to take advantage of vulnerable people.
"This organization pursues goals— through its writings, its concept and its disrespect for minorities — that we cannot tolerate and that we consider in violation of the constitution. But they put very little of this into practice," said Erhart Koerting, Berlin's top security official.
Though there was not enough proof to justify opening proceedings for such a ban, domestic intelligence services will continue to monitor the church's activities.
Scientology was founded in 1954 by the late science fiction writer L. Ron Hubbard.