Members of a Sussex bonfire society questioned by police after the burning of a caravan carrying the number plate P1KEY will not be prosecuted.

Ken Macdonald QC, Director of Public Prosecutions, said he understood the repugnance caused but supported the ruling that there was insufficient evidence to prove incitement to racial hatred or public order offences.

The ruling was condemned by Travellers' groups but the 12 members of the Firle Bonfire Society welcomed the decision. Roz South, their spokeswoman, said: "We consider justice has finally prevailed.

"It has been a very stressful and difficult time for the 12 people under investigation. They can now carry on with their lives without the threat of prosecution hanging over them.

"The decision confirms what we always said, there was no racial motivation or intention to attack the travelling community.

"Our criticisms were always directed at those authorities who had claimed to be powerless in the face of an outbreak of anti-social behaviour that seriously affected our local community.

"Firle Bonfire Society will continue to be involved in Sussex bonfire celebrations and looks forward to the 2004 season with traditional enthusiasm."

Andrew Small, society member and Lewes district councillor who made a speech before the caravan was torched later resigned from the Liberal Democrats over the issue. He was unavailable for comment.

The society apologised for last October's stunt at Firle, near Lewes, after being condemned by the Commission for Racial Equality. Effigies of adults and children inside the burning caravan caused an uproar.

The DPP said: "This was a complex and challenging case and I am entirely satisfied with the decision reached by the reviewing lawyer that there should be no prosecution.

Mr Macdonald added: "I quite understand the disquiet and repugnance of those who were offended by the burning of a caravan with effigies of people inside, including those of children, and the number plate P1KEY on it, which they considered abusive and insulting to travellers."

Brighton-based Friends, Families and Travellers attacked the ruling but Sussex Police, which interviewed all 12 bonfire society members, said the incident had been thoroughly investigated.

A spokesman for the Commission for Racial Equality said: "This incident arose from community tensions due to an unauthorised encampment, the result of inadequate site provision for the traveller community."