Police feared protection racketeers had moved in on a crime-hit area of Portsmouth – leaving their targets too scared to talk.
Portsmouth central police set up operation Falsetto to target crime problems including alleged blackmailing in Portsea.
They investigated claims some Queen Street traders were being pressured into paying money to ensure their businesses were ‘protected’.
But officers had failed to break down a wall of silence from shopkeepers, including some victims of burglaries and damage.
Detective Inspector Nigel Bailey said: ‘We had information shopkeepers in particular were being pressurised and made subject to threats.
‘A team of officers went to interview shopkeepers but insufficient evidence of extortion or blackmailing was forthcoming to warrant proceeding at this stage.
‘I have my suspicions that there may be more in these allegations but shopkeepers may be more concerned about possible recriminations than helping our inquiries.
‘It is a depressing view of the state of public confidence in the justice system,’ he added.