Swedish prosecutors closed the investigation into the unsolved 1986 murder of the Social Democrat prime minister, Olof Palme.

The case’s chief prosecutor, Krister Petersson, said the case was being closed because the main suspect, Stig Engström, had died in 2000.

Palme was shot in the back at close range in central Stockholm while walking home from the cinema with his wife and son. The disappearance of the assailant into a side street sparked a huge manhunt and a multitude of conspiracy theories.

A petty criminal was convicted of the killing in July 1989 but the judgment was later overturned, clearing the field for decades of speculation about the involvement of forces ranging from the South African security services to the Swedish military and the CIA.

"My decision is to discontinue this investigation since the suspect is deceased," Sweden's Chief Prosecutor Krister Petersson said on Wednesday in a press conference held alongside Head of Investigation Hans Melander. They have been in charge of the case since 2017.

Petersson named the deceased suspect as Stig Engström, an opponent of Olof Palme's left-wing values.

Engström had been among the first people to arrive on the crime scene in 1986, from the Skandia insurance company where he worked.