British prosecutors said on Thursday an ageing member of the House of Lords would not face charges over serious allegations of historical sex abuse because he was too unwell.

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Lord Greville Janner, 86, a former Labour member of parliament and ex-president of the Board of Deputies of British Jews, had been investigated by police over allegations made by more than a dozen former residents of children's homes in the 1970s and 1980s.

Lord Greville Janner speaking at Hadassah Hospital in Jerusalem in 2006 (Photo: EPA)

However, the Crown Prosecution Service (CPS) said that although there was enough evidence to have charged Janner, who has always denied any wrongdoing, he was suffering from severe dementia and not fit to go on trial.

"The CPS considers that in the light of the medical evidence Lord Janner would inevitably be found not fit to plead, not fit to instruct his legal team and not fit to challenge or give evidence in a trial," it said in a statement.

"That means that a criminal trial, to determine whether or not he was guilty of any offense, could not now properly take place."

Police said the decision was wrong, expressing concern about the message it sent out to victims. They said they would consider what options they had to challenge the decision.

According to the Telegraph, Janner has worked to help Holocaust survivors receive compensation, and also chaired the Holocaust Educational Trust, as well as formerly serving as vice president of the World Jewish Congress.

In 1991, during a trial of a children's home manager in Leicestershire who was jailed for abusing children in his care, Janner was named in court as having abused a teenage boy. He later made a statement in parliament dismissing the claims as "lies."

Last year, a senior police chief told the Daily Mail newspaper he had been ordered to drop an investigation into Janner in 1989.

Mick Creedon, now Chief Constable for Derbyshire, said he was working as a detective when had been forbidden by his then bosses from arresting Janner or searching his home.

Leicestershire Police re-launched an investigation in 2013 to review complaints that had been made against the peer between 1991 and 2007, when the CPS said both police and prosecutors had made mistakes in not prosecuting Janner.

The CPS said the new inquiry had produced evidence that would have justified charging Janner with 16 indecent assaults and six other counts.

It said it accepted that alleged victims, who had been vociferous in calling for Janner's prosecution, would be disappointed.

"The lack of a prosecution will be extremely disappointing to complainants," said Alison Saunders, Britain's Director of Public Prosecutions, in a statement.