CAYUGA, Ont. - An email from Ontario's top cop telling municipal officials they'd be billed if officers were injured during protests over an aboriginal occupation does not warrant a criminal prosecution, the Crown told court Wednesday in withdrawing the charge.

Ontario Provincial Police Commissioner Julian Fantino was facing a charge of trying to influence municipal officials in connection with the ongoing occupation in the town of Caledonia -- an offence that carries a five-year prison term if convicted.

The private charge was brought by activist Gary McHale, who has led a number of rallies decrying what he calls two-tier justice in the policing of the Six Nations occupation south of Hamilton.

The April 7, 2007 email Fantino sent to county officials said if any officers were injured in protests "instigated by Mr. McHale, or his followers, the commissioner would send a bill for the costs of policing to Haldimand County," special Crown prosecutor Milan Rupic told a packed courtroom.

While Rupic said he appreciated that some members of the municipal council were "upset or felt threatened, so to speak, at receiving the email" he added he was satisfied that Commissioner Fantino's remark "does not and cannot constitute an offence."

"Whatever the reaction of the counsellors to the email may have been does not affect the underlying fact that in Canada it is not criminal if you tell someone that you might send them a bill for services," said Rupic, a prosecutor with the Justice Prosecutions Unit, which was set up to handle cases involving police or other justice officials.

"The Crown hereby terminates the prosecution by withdrawing the information."

McHale stood up in court and vowed to continue the fight. Anticipating that the charges would be dropped, he said he's already seeking a review of the case in Superior Court.

"I don't see it as a loss. I see it as the justice of the peace overstepped his jurisdiction," McHale said outside the court.

"It means I have to file another judicial review. There's no doubt in my mind the Superior Court will overturn what the (justice of the peace) just did today."

Fantino has denied any wrongdoing and has vowed to "vigorously" fight the allegations.

The commissioner was not in the courtroom Wednesday, but in a press release expressed "satisfaction" with the Crown's move, calling it a "logical outcome to an unsubstantiated allegation."

"I have the utmost respect for and confidence in the judicial system and am content that this vexatious allegation was dealt with in a just and appropriate manner," said Fantino.

"I remain proud of the difficult work done by the OPP over the last several years in Caledonia. Our efforts have resulted in a relative calm and minimized potential violence. The results speak for themselves."

The move by the Crown brought renewed calls from the Opposition for Premier Dalton McGuinty to appoint a prosecutor from another province to review the evidence.

"Bring in an outside prosecutor so people know there's objectivity," said Progressive Conservative Leader Tim Hudak.

Attorney General Chris Bentley said the matter was dealt with in the "appropriate manner."

"The Crown who is head of the Justice Prosecutions Unit had carriage of the file and spoke to the matter in court this morning. He was the one who made the decisions in that matter," said Bentley, who added Rupic had no involvement in prior proceedings in the case.

McGuinty has faced criticism for appearing to play down the allegations against Fantino.

Last month, McGuinty said there was no need for Fantino to step down until the charge was dealt with because it involved "private information being put forward by a private citizen." McGuinty later denied he was trying to trivialize the charges.

The justice of the peace who originally heard McHale's complaint refused to issue a summons or warrant against the commissioner last year.

However, Superior Court Justice David Crane, who reviewed the case, ordered the justice of the peace to issue such an order in a ruling released Dec. 31.

On Wednesday, Rupic noted the judge or justice who makes such an order cannot consider whether there is a reasonable prospect of conviction.

"However, in all criminal prosecutions the Crown is required to review each case to determine whether there is a reasonable prospect of conviction," he said.

The test to see if that standard is met is a "significantly higher and stricter standard than the test that governs the issuance of process in a private prosecution."

The case is not the first time Fantino and McHale have squared off in court.

McHale faces charges of counselling mischief not committed and Fantino testified during a preliminary hearing last year that he told subordinates he would have gladly arrested McHale himself for inciting civil unrest in Caledonia.

On Tuesday, McHale released volumes of Crown disclosure to the media containing emails from December 2007 in which officers discuss the possibility of a court order or charges against McHale.

"At some point McHale has to go," Fantino wrote in one email.

In another, he wrote: "What are we doing in Caledonia? We seem to be in an almost state of paralysis when it comes to proactively doing anything respecting McHale et al.

"If it isn't us being told what to mdo (sic) by feeble Crowns, it's our own lack of fire. It seems to me that we are reactive to the point that McHale is the orchestra leader while we are almost captive to his nonsense."

McHale is representing himself in that case as well and questioned Fantino on the witness stand.

During one exchange Fantino told McHale that his repeated visits to Caledonia, already tense over the lengthy aboriginal occupation, dangerously inflamed the situation.

The commissioner called McHale a "lightning rod to the conflict" during his testimony and added police saved McHale from "grievous bodily harm numerous times."