Cherie Blair has been investigated by police over claims that she motioned to slap a 17-year-old boy.
Cherie Blair was in Scotland when the alleged incident took place
Strathclyde Police took statements from witnesses to the alleged incident, which occurred at a national school sports event in Glasgow last Saturday.
Mrs Blair was reported to have made a playful gesture to a boy who made a "rabbit ears" gesture behind her head.
Police said "it had been established no incident had taken place" and that the inquiry into the matter was now closed.
Six detectives were sent to investigate after officials from the Child Protection in Sport Unit complained to police.
"The Strathclyde police undertook an investigation, including taking statements from a number of people who were present," Downing Street said in a statement.
"These included the 17-year-old boy involved and Mrs Blair's protection officer, who was with her at all times, who said that nothing had occurred between Mrs Blair and the youngster.
"We understand that no further action is planned."
The boy was named by the Mail On Sunday as Miles Gandolfi, of the England under-17 epee fencing team.
Miles' mother Catherine told the paper that what had happened between Mrs Blair and her son was a light-hearted exchange.
She said: "I have absolutely no idea why it all blew up. It just seems totally bizarre.
"We couldn't believe it when the police got involved. I don't know who complained."
Journalist Lauren Booth, half-sister of Cherie, said: "This is a case of Cherie being touchy-feely and somebody in the audience going 'oh, we can make something of this'."
Ms Booth told Sky News' Sunday Live: "In this case, most of the papers agree that the people who are dislikeable are those political correctives who want to stop an adult going 'hey' and joshing around with people."
Conservative Glasgow MSP Bill Aitken said the case had been a massive waste of police time.
He said: "This has all the hallmarks of a monumental waste of police time.
"They have a duty to follow up any complaints, but I'm glad to say they're dropping it and getting on with catching the real criminals who cause so much harm to society."