London's Metropolitan Police Service says it has dropped an application to force the Guardian newspaper to disclose the sources for its reports on the News International phone hacking scandal.

On Friday, Scotland Yard said it had tried to obtain a court order under the Official Secrets Act to identify "evidence of potential offences resulting from unauthorised leaking of information".

However, the service withdrew the application on Tuesday following a meeting with the Crown Prosecution Service (CPS), the country's public prosecutor.

"The MPS has taken further legal advice this afternoon and as a result has decided not to pursue, at this time, the application for production orders," a police spokesman said.

"We have agreed with the CPS that we will work jointly with them in considering the next steps."

The Guardian was at the forefront in uncovering the scale of phone hacking at the now closed News International publication the News of the World, owned by Rupert Murdoch.

The Met's decision to pursue the paper through the courts raised fears of a crackdown on investigative journalism.

Guardian editor Alan Rusbridger called the move "vindictive", adding: "We shall resist this extraordinary demand to the utmost".

Police thought the secrets act could have been breached in July when the newspaper revealed the voicemail of a teenage murder victim had been hacked into. The story led to a public outcry and News of the World closed shortly afterwards.

AFP