The woman at the centre of a high-profile online bullying case was exonerated by a US judge today - despite having previously been found guilty of computer crimes that led to the suicide of her teenage neighbour.

At a sentencing hearing in Los Angeles earlier today, Lori Drew, 50, was told that the verdict of a Californian jury would be overturned and she would not face imprisonment for her role in the death of 13-year-old Megan Meier, who killed herself in 2006 after being bullied on MySpace.

Despite having been found guilty on a number of minor counts last November, US District Judge George Wu overruled the jury in the original trial and said that Drew should be acquitted.

Although the ruling was tentative - and the decision will not become final until papers are filed later this week - Wu said he was concerned that the case set a dangerous precedent for prosecuting anybody who broke the terms of service of a website.

The shocking development marks the latest twist in the long-running case - which had been heralded as a landmark test in US law, as the first prosecution over accusations of cyberbullying.

Meier, from Darden Priarie in Missouri, killed herself three years ago after receiving a string of nasty messages from a young male friend she had befriended online. A police investigation discovered that the bully's identity was fake and that the entire friendship had, in fact, been a hoax operated by Drew - the mother of another teenager who had been friends with Meier.

Reacting to what they claimed was bullying from Meier towards Drew's daughter, she and a friend concocted the persona of 16-year-old "Josh Evans", a boy who had recently moved to the area.

"Josh" began exchanging messages with Meier, before telling her in October 2006 that "the world would be a better place without you". She killed herself soon afterwards.

As details of the case emerged, public outcry over the case grew, and Drew - who initially referred to the hoax as a "joke" - became the subject of widespread condemnation for her behaviour.

But without legislation to specifically address such cases, the incident was seen as a test case for cyberbullying in the US. Despite public pressure, officials struggled to build a case against Drew. Local prosecutors in Missouri failed to take the case forward, eventually leading to the authorities in California - who argued they had jurisdiction because MySpace is based in Los Angeles - to prosecute.

After legal arguments and a short trial, Drew was only found guilty of three reduced charges relating to her misuse of computers, while the jury failed to reach a verdict on a fourth charge of criminal conspiracy.

Last month, however, Judge Wu indicated that he was still considering the defence's motion to overturn the verdict, after labelling the application of computer crime laws to the case as "weird".

"Is a misdemeanor committed by the conduct which is done every single day by millions and millions of people?" Wu asked lawyers at a hearing last month. "If these people do read [the terms of service] and still say they're 40 when they are 45, is that a misdemeanor?"

Megan's family had argued that Drew should be held responsible for her actions, particularly since they were clearly intended to manipulate a child. Prosecutors had sought the maximum three-year prison sentence and a $300,000 (£183,000) fine.

