Michael Barrymore has dropped a compensation claim for being arrested over the death of a man at his home.
Barrymore was investigated following the death of Stuart Lubbock in his swimming pool 18 years ago. He sued Essex Police claiming the arrest had damaged his career.
Court of Appeal judges concluded the 67-year-old TV presenter would be entitled to only “nominal” damages.
Mr Lubbock’s father Terry said: “That’s brilliant news. I’m raising my arms.”
Mr Lubbock, 74, added: “I am still determined to get justice for Stuart. He was only 31 when he died. I am determined to hang on to the end for him.”
Stuart Lubbock’s body was found in the pool in Roydon, Essex, in March 2001 after a party in which drugs and alcohol were taken.
A post-mortem examination revealed he had suffered sexual assault injuries.
In 2007 Barrymore was arrested in connection with the death, but was later released without charge, and withdrew from public life.
His arrest was found to be unlawful because the arresting officer did not have reasonable grounds to suspect Barrymore, a high court judge ruled.
He said it was “devastating” to his career and had valued his claim at more than £2.4m because of lost earnings.
Essex Police argued that he was entitled to only a “nominal” payout, and appeal judges ruled in the force’s favour.
A spokeswoman said the claim had been discontinued by agreement and it had made no payment to the entertainer.
Barrymore – real name Michael Parker – and a lawyer who represented him were not available for comment.
In a statement Essex Police said: “At the heart of this case remains the fact that the family of Stuart Lubbock continue to live with the pain of the unanswered questions surrounding his death on March 31 2001.
“We continue to search for justice for Stuart’s family and would ask anyone who has information about his death to call us or Crimestoppers anonymously. It is never too late to do the right thing.”