Northern Ireland’s authorities have abandoned the prosecution of the only British soldier charged over the Bloody Sunday killings almost 50 years ago, in a decision that risks inflaming tensions close to the height of the region’s sectarian marching season.

The Public Prosecution Service said it had decided to withdraw charges brought in 2019 against Soldier F, a former member of the British army’s Parachute Regiment.

He was accused of the murder of two men and the attempted murder of five others on January 30, 1972, when the British army killed 13 civilians on the streets of Londonderry, also known as Derry. Another 15 people were wounded after members of the Parachute Regiment opened fire on demonstrators in the Bogside, a predominantly Catholic part of the city.

Belfast prosecutors also said they would not begin proceedings against Soldier B, another member of the British army, who was facing prosecution for the murder of 15-year-old Daniel Hegarty in July 1972 and the wounding with intent of his cousin Christopher Hegarty.

“I recognise these decisions bring further pain to victims and bereaved families who have relentlessly sought justice for almost 50 years and have faced many setbacks,” said Stephen Herron, the director of Northern Ireland’s Public Prosecutions Service.

He said the decision was taken because of an April 30 court ruling declaring that evidence given by two other soldiers to the Royal Military Police about the events was inadmissible. That “led to the conclusion that a reasonable prospect of conviction no longer existed in proceedings against both Soldier B and Soldier F”.

“In these circumstances, the prosecutions cannot proceed,” Herron added, while stressing that the outcome “does not undermine previous findings that those killed and injured in these tragic incidents were entirely innocent”.

Sammy Wilson, the East Antrim MP, said: “The announcement that two army veterans will now not face trial raises questions significant questions of the justice system . . . The PPS took forward cases with evidence which was so unequivocally ruled out, and obviously bear responsibility for their failure. It would be useful to hear from the justice minster and whether she views the PPS pursuit of these cases and the use of this evidence as proportionate and justified.”

Bloody Sunday was one of the deadliest days in 30 years of sectarian violence between Northern Ireland’s nationalists, generally Catholics who want to reunify Ireland, and unionists, generally Protestants who want to remain part of the UK. The conflict claimed more than 3,600 lives before the 1998 Good Friday Agreement secured peace.

Sectarian tensions are rising in the region again in the wake of new post-Brexit trading rules that outraged unionists by creating a customs border in the Irish Sea.

Many fear trouble will break out at unionists’ traditional July marches and bonfire celebrations commemorating the victory of the Protestant British King William of Orange over the deposed Catholic monarch James II in 1690 in the modern-day Republic of Ireland.

“This is a bad day for justice,” said Michelle O’Neill, head of nationalist party Sinn Féin and Northern Ireland’s deputy first minister. “The message is clear, British state forces who gunned down peaceful protesters and a child in Derry acted with impunity and will be allowed by the state to get away with murder.”

Ciaran Shiels, a solicitor at Madden and Finucane who represents the victims’ families, said they had already told the Public Prosecution Service they would be seeking “an immediate judicial review” of the decision not to prosecute Soldier F.

“The admissibility of RMP [Royal Military Police] statements in relation to the events of Bloody Sunday is a matter already under active judicial consideration by the High Court following proceedings which we lodged last December,” he said. “The High Court will hear detailed legal argument over five days in September. In those circumstances, the decision by the PPS to halt this prosecution is clearly premature.”