Prosecutors in Santa Fe, in the US state of New Mexico, had been pressing forward with two involuntary manslaughter charges against the 65-year-old Hollywood star.

Special prosecutors Kari T Morrissey and Jason J Lewis said "new facts were revealed that demand further investigation and forensic analysis" in the case against Baldwin.

Their statement continued: "Consequently, we cannot proceed under the current time constraints and on the facts and evidence turned over by law enforcement in its existing form.

"We therefore will be dismissing the involuntary manslaughter charges against Mr Baldwin to conduct further investigation."

The prosecutors add that their decision "does not absolve Mr Baldwin of criminal culpability and charges may be refiled".

There are still at least five ongoing civil cases against Baldwin and the producers of Rust.

A statement from Baldwin's lawyers, Luke Nikas and Alex Spiro, said: "We are pleased with the decision to dismiss the case against Alec Baldwin and we encourage a proper investigation into the facts and circumstances of this tragic accident."

After the news was announced, Baldwin posted a picture on Instagram of himself with his wife Hilaria saying: "I owe everything I have to this woman, (and to you, Luke)", a possible reference to his lawyer Luke Nikas.

However, prosecutors are continuing with involuntary manslaughter charges against weapons supervisor Hannah Gutierrez-Reed. She has pleaded not guilty.

Ms Hutchins, 42, died on 21 October 2021 during filming at the Bonanza Creek Ranch near Santa Fe.

Baldwin was rehearsing with a pistol for a scene when the prop gun went off, killing Ms Hutchins and wounding director Joel Souza.

The actor said the gun went off accidentally and he did not pull the trigger.

A subsequent FBI forensic report found the weapon could not have fired unless the trigger was pulled.

But now a source says there is evidence that the gun had been modified, so prosecutors were not confident enough to proceed.

Melina Spadone, a lawyer for Rust Movie Productions, exclusively told Sky News: "We have every confidence in the judicial system and that the cause of Halyna's death will be thoroughly investigated.

"Alec is a consummate professional… for everyone else, it's a good outcome in the sense that we think that justice has been served."

It comes as Baldwin resumed filming of Rust at the Yellowstone Film Ranch in Montana, 18 months after Ms Hutchins died.

The production company finalised a settlement last month with New Mexico workplace safety regulars over "serious" violations and agreed to a $100,000 (£80,000) fine to resolve a scathing safety review which revealed unheeded complaints and misfires on set before Ms Hutchins was killed.

Earlier this month, Baldwin asked for a lawsuit filed by the parents and sister of Ms Hutchins to be dismissed by a judge.

The actor said Olga Solovey, Anatolii Androsovych, and Svetlana Zemko filed the suit in February to "obtain compensation".

It alleges battery, negligence, intentional infliction of emotional distress and loss of consortium, which is when a plaintiff seeks to recover compensation for damages to certain relationships on which they are mutually dependent.

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Dave Halls, the first assistant director on the set, was given a suspended sentence after he pleaded guilty to negligent use of a deadly weapon. Prosecutors said he was responsible for set safety.

Baldwin has repeatedly denied any wrongdoing and previously pleaded not guilty to the two charges of involuntary manslaughter that have now been dropped.

The actor was also sued by Ms Hutchins' husband, Matthew Hutchins, alleging that reckless behaviour and cost-cutting led to her death.

A settlement was reached outside of court in October 2022.

Three crew members are also among those to have started legal action, saying they have suffered anxiety and symptoms of post-traumatic stress disorder since the shooting.