The Crown Prosecution Service has found that a notorious slur against Liverpool supporters after the 1989 Hillsborough disaster, that some people trapped in the crush outside the Leppings Lane turnstiles had seriously burned a police horse, was false.

The CPS concluded there was evidence to suggest that a former mounted South Yorkshire police constable, David Scott, had given an untrue account when he claimed his horse appeared singed afterwards, but that there was not enough evidence to prove to a criminal standard that his statements were fabricated.

The evidence was sufficient, the CPS said, to justify a criminal charge against a farrier who made a statement at the time to support Scott in a police disciplinary investigation held into supporters’ complaints that Scott had lashed out and hit people trapped in the crush. Scott did not face any action over those claims.

The farrier claimed to have examined the horse and found 14 “distinct burns” and numerous others to its rump and tail area, including burns which pierced the horse’s skin.

The CPS found there was enough evidence that the farrier lied about having seen such injuries to charge him with tending and intending to pervert the course of justice.

Expert evidence, the CPS said, was clear that such serious injuries could not be caused using cigarettes. Tests conducted on a horse’s cadaver for the CPS found that even a laser took one minute to penetrate the skin.

The CPS decided, however, that it was not in the public interest to prosecute the farrier. Its reasons, communicated to the bereaved Hillsborough families, the suspects and other interested parties, are understood to have included that the farrier was young at the time, of good character and was acting out of “misplaced loyalty” to Scott “rather than part of a systemic attempt to blacken fans’ names”. The CPS also said “there is no identifiable victim”.

The lurid claim that a police horse had “cigarette burns on its rump” was included by Lord Justice Taylor in his official 1989 report into the cause of the disaster, in which 96 people were killed in a crush on the Leppings Lane terraces. Last year a jury concluded that they were unlawfully killed due to police negligence.

In his 1989 report Taylor substantially rejected South Yorkshire police claims that many Liverpool supporters were drunk and misbehaving, and concluded that the deaths were caused principally by police mismanagement. Nevertheless he accepted the story of the burned horse, stating: “Clearly that was the despicable work of a hooligan whether in drink or not.”

Many Liverpool supporters believed for years that these claims were false, but they were not challenged formally for more than 20 years. Then a man who survived the crush began to research several police allegations, including about the burned horse, and complained to the Independent Police Complaints Commission. The man, who has maintained his anonymity for personal reasons, is now understood to be considering a legal challenge to force the CPS to review its decision.

The IPCC deputy chair Rachel Cerfontyne said it had been “vitally important” that the complaint had been robustly investigated.

“Following the conclusion of all criminal proceedings relating to the Hillsborough disaster, we will consider whether any former police officers, including all of those referred to the CPS for charging decisions, would have had cases to answer for misconduct if they were still serving,” she said. “The evidence supporting these findings will be set out in a final investigation report.”

Scott declined to comment when asked about his claims by the Guardian last year, and requested at the time not to be contacted again.

Six men, including the former South Yorkshire police chief constable David Duckenfield, who was in command of the match at Hillsborough, have been charged with criminal offences. The CPS is still reviewing evidence passed to it by the IPCC relating to two former West Midlands police officers.