Cuba anger at US exile decision
Luis Posada Carriles is accused of blowing up a Cuban plane in 1976, killing 73 people.
Once employed as a CIA agent, 79-year-old Posada was detained in May 2005 after entering the US.
Cuba has accused the US of influencing the judge's ruling because it feared Posada would reveal state secrets.
'Fraud and trickery'
"Posada Carriles is free and without legal charges against him, it is of the entire responsibility of the White House," Dagoberto Rodriguez Barrera of the Cuban Interests Section in Washington said in a statement.
He said that the White House had done everything it could to protect "the Bin Laden of the hemisphere" from revealing US government links with terror activities.
District Judge Kathleen Cardone dismissed the immigration fraud indictment against Posada in a court in El Paso, Texas.
She accused the US government of "fraud, deceit, and trickery" in its handling of Posada's case, saying it had disguised a criminal interrogation as an immigration interview.
"In addition to engaging in fraud, deceit and trickery, this court finds the government's tactics in this case are so grossly shocking and so outrageous as to violate the universal sense of justice," she wrote in her ruling.
"As a result, this court is left with no choice but to dismiss the indictment."
The judge's surprise decision leaves Posada's fate in doubt, though US authorities have ruled out returning him to Cuba or Venezuela.
Anger
Venezuelan leaders have also accused the US of treating Posada with kid gloves because of his CIA past.
Posada was released on bail last month, but had been due to go on trial next Monday.
A veteran anti-communist, Posada was jailed in Venezuela over the airliner bombing, but escaped from jail in 1985 during an appeal against his conviction.
He was then jailed in Panama in 2000 for plotting the assassination of his arch-enemy Cuban leader Fidel Castro, but was pardoned and released four years later.
US authorities are also reported to be investigating whether Posada was involved in the bombing of a Havana hotel, in 1997, that killed an Italian tourist.
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