Zaid al-Hilli, the brother of Saad al-Hilli, a British-Iraqi man mysteriously gunned down with his family and a local man in the French Alps in 2012, leaves Guildford police station, south of London, on January 15, 2014 after having his bail cancelled. Picture: CARL COURT

 London - The brother of a British-Iraqi man mysteriously gunned down with his family in the French Alps in 2012 was released from bail on Wednesday and told he faces no further police action.

Zaid al-Hilli, who was arrested in June last year on suspicion of conspiracy to commit murder, had his bail cancelled because there was not enough evidence to charge him, Surrey Police said in a statement.

"At this stage there is insufficient evidence to charge him with any criminal offence and no further police action is being taken at this time," it said.

Saad al-Hilli was shot dead along with his wife and her mother in September 2012 in a woodland car park close to the village of Chevaline, in the hills above Lake Annecy in south-east France.

His two daughters, aged seven and four at the time, survived the gruesome attack but French cyclist Sylvain Mollier, apparently an innocent bystander, was also killed.

The Hilli brothers were engaged in a bitter inheritance dispute which French investigators believed was the motive behind the killings.

Zaid al-Hilli listened Wednesday as a police officer read out the statement to media waiting outside the police station in the Surrey town of Guildford, southwest of London.

"This remains a French-led investigation and officers from the Surrey and Sussex major crime team continue to work closely with the French authorities," the statement said.

"We have carried out exhaustive enquiries in the UK on a number of active lines of enquiry."

He had previously publicly protested his innocence, accusing French investigators of a cover-up, but did not comment as he walked away from the police station.

In October he told BBC television: "They are covering up for someone in France in that region and they know it.

"Sylvain Mollier was involved in family disputes and was an outsider to (his) rich family. There is something more to it locally... most crime has local roots."

Zaid said the brothers, who were born to middle-class parents in Baghdad before the family moved to Britain in 1971, had enjoyed a close relationship but came to blows over the family house inherited from their mother.

The Hillis lived in the Surrey village of Claygate, a leafy suburb outside London.

Zaid, who works as a payroll manager for a leisure company, said he had given 25 hours of interviews to British police but has refused to go to France for further questioning. - AFP