The family, which has already vowed to launch private proceedings, was told by prosecutors that it could not be established that a criminal act had taken place.
The family, which said it had evidence that Mr Blanco was unlawfully killed, launched a lengthy campaign for justice after two police reports and an inquest failed to establish exactly what triggered his fall from a balcony in Whitechapel, east London.
But in a meeting at the CPS' central London headquarters, Jenny Hopkins, head of the organisation's complex casework, said: "None of the evidence is capable of establishing to the required standard that Mr Blanco was thrown or pushed from the balcony or that any other individual was present at the time he fell.
"If any further evidence does come to light, we will, of course, review our decision in accordance with our normal practices.
Mother Sheila Blanco accused police of staging a cover-up as she said she was "disappointed but not surprised" by the CPS decision.
"It is a police cover-up - I really did not expect anything better," she said.
"What we do in the future is not yet clear."
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