Lord Janner will not face charges after the Crown Prosecution Service concluded an investigation into "extremely serious" allegations of historic child abuse.
Alison Saunders, the director of public prosecutions, said the 86-year-old was not well enough to stand trial as he is suffering from severe dementia.
Lord Janner, a former Board of Deputies president who has held numerous communal leadership roles over the past six decades, has repeatedly denied any wrongdoing.
His lawyers and family said in a statement that he was "a man of great integrity and high repute with a long and unblemished record of public service".
The CPS announced its decision last Thursday following heightened public interest and suggestions of a cover-up.
Social media antisemitism
A wave of abuse hit Twitter following the Lord Janner news, with talk of Jewish cabals and cover-ups.
#LordJanner was full of such comments. Tweeter @migspickey wrote: Why doesn't anyone mention the elephant in the room? The fact that this man is a prominent Jew.
@BlueEagle212 tweeted: Jew scum Lord Janner could have been prosecuted in 1990s. Why only now 20 years later? It's all those Jew favours, etc.
@TPeryer Vile said: Jew and cover up how many more cover ups are going on Westminster cesspit.
It had been considering Lord Janner's conduct since last year after receiving information from Leicestershire Police. Officers said more than a dozen people had made allegations relating to the peer. The majority were vulnerable residents of Leicestershire children's homes between 1970 and the late 1980s.
It was claimed the former Labour MP for Leicester West had befriended the manager of a home in order to abuse children under its care.
The CPS said Lord Janner should have been prosecuted in the past. It believed the "evidential test" had been passed on the basis of testimony from nine individuals. Gathered evidence would have been sufficient to charge him with more than 20 counts of indecent assault and sexual abuse, including of boys under the age of 16, between 1969 and 1988.
But Ms Saunders said: "The CPS has concluded that Lord Greville Janner should not be prosecuted because of the severity of his dementia which means he is not fit to take part in any proceedings, there is no treatment for his condition, and there is no current or future risk of offending."
The decision not to prosecute was "in no sense deciding or implying that the allegations that have been made are established or that Lord Janner is guilty of any offence", it added.
Four medical experts examined Lord Janner in recent months and concluded his dementia was too severe for him to stand trial.
It is understood officers interviewed around 20 men who claimed they were abused by him more than two decades ago. He strongly denied the allegations when they first surfaced.
The investigation has been repeatedly linked to the case of one of the country's most notorious convicted paedophiles. Frank Beck was given five life sentences in 1991 for sexually abusing boys and girls.
Beck, a former Liberal councillor and head of three children's homes in Leicestershire, died in prison in 1994.
During Beck's three-month trial, a witness claimed he had been abused by Lord Janner. The politician denied any wrongdoing and addressed the allegations in Parliament himself in December 1991, weeks after Beck's conviction.
He told fellow MPs that the witness - Paul Winston - had conspired with Beck in an attempt to derail the police investigation. "They combined to make disgraceful, contemptible and totally untrue allegations of criminal conduct against me," Lord Janner told the Commons.
More than a dozen MPs subsequently paid tribute to their colleague.
There has been a furious response in the past week to the CPS's decision, with Leicestershire Police Assistant Chief Constable Roger Bannister suggesting the force might mount a legal challenge.
Several alleged victims waived their right to anonymity to tell the media they had been abused by Lord Janner.
The nature of the pensioner's illness was also widely questioned after the House of Lords confirmed it had received a letter, signed by the peer, in early April regarding his formal leave of absence from Parliament.
Commentators also highlighted Lord Janner's own insistence that Nazi war criminals should be tried regardless of their mental state of health. In a JC interview in 2012, he said: "I don't care what bloody age they are, these criminals should have been dealt with years ago."
Senior Jewish community leaders contacted by the JC this week said they were unaware of any investigations into Lord Janner after the Beck trial. A number of ex-officials said the reception received by Lord Janner in the Commons after the Beck trial had been seen as the end of the matter.
Eric Moonman, former senior vice-president of the Board and a former chair of Parliament's mental health committee, said: "From the point of view of the disease of dementia, there are very few cases where people can even partially recover.
"Therefore it would be intolerable if such a patient, whoever he was, was asked to appear in court to give evidence, to challenge any prosecution and to consult with his lawyers."
One Jewish community leader in Leicester said there had been confusion in the city in the 1990s when Beck was convicted, but the allegations against Lord Janner were ignored. "It was never discussed in the Jewish community," the senior figure said.
A spokesperson for the Friends of Israel Educational Foundation said the organisation had withdrawn Lord Janner's name as a patron in the last few months "because of his ill health".
The peer is listed as founding patron of the board of trustees of the Holocaust Education Trust, and as a vice president of the Jewish Leadership Council. Neither organisation responded to a request for comment.
