Boris Johnson will not face a criminal investigation into his dealings with US businesswoman Jennifer Arcuri when he was Mayor of London.
The Independent Office for Police Conduct said there was no case to answer after a nine month review.
It was alleged Ms Arcuri received favourable treatment during Mr Johnson’s time as Mayor due to their friendship.
Mr Johnson has always denied any wrongdoing.
He was referred to the police watchdog in September over allegations of misconduct in a public office, as the role of the mayor of London is also London’s police and crime commissioner.
The investigation was sparked by a report in the Sunday Times that Ms Arcuri joined trade missions he led, and that she received thousands of pounds in sponsorship grants.
The police watchdog said it had found no evidence indicating Mr Johnson influenced the payment of any sponsorship monies to Ms Arcuri or that he influenced or played an active part in securing her participation in trade missions.
IOPC Director General Michael Lockwood said: “While there was no evidence that Mr Johnson influenced the payment of sponsorship monies or participation in trade missions, there was evidence to suggest that those officers making decisions about sponsorship monies and attendance on trade missions thought that there was a close relationship between Mr Johnson and Ms Arcuri, and this influenced their decision-making. “
The review “established there was a close association between Mr Johnson and Ms Arcuri and there may have been an intimate relationship”, the watchdog said.
But the Greater London Assembly code of conduct which applied at the time meant that, even if the relationship was intimate, Mr Johnson had no obligation to include Ms Arcuri’s business interests in his own register of interests, it added.
Mr Johnson is facing a separate inquiry by the London Assembly into alleged conflicts of interest, which had been put on hold until the police watchdog published its findings.
Len Duvall, the Greater London Authority’s oversight committee chair, said: “The IOPC was looking specifically at whether he committed a criminal offence.
“That’s not our remit and their decision doesn’t have any real bearing on our investigation, which will focus on his conduct as Mayor of London.”
The Assembly’s investigation will look at whether Mr Johnson “conducted himself in a way that’s expected” from a senior public official, said Mr Duval.
“The oversight committee will take into account the current emergency when looking at the timetable for the investigation,” he added.