Ramsay Dalgety, who moved to Tonga in 1991, was accused of giving false evidence into the 2009 sinking which cost 74 lives.
At a court hearing yesterday, the case was thrown out due to insufficient evidence.
Lord Dalgety’s wife, Mary, originally from the Capital, died “suddenly” in Vaiola Hospital in the Tongan capital Nuku’alofa on Sunday.
Described as the “adored mum of Caroline and Neil”, her funeral was held in Tonga on Wednesday with a memorial service set to take place in Edinburgh “on a date to be confirmed”.
Lord Dalgety appeared in court in relation to the sinking of MV Princess Ashika in August 2009, the worst accident in the country’s maritime history. Among those who drowned was Daniel MacMillan, 48, from Islay.
The former director of Scottish Opera was secretary of the Shipping Corporation of Polynesia, which operated the government-owned ferry.
The lord was accused of playing down his involvement in the corporation during the official inquest into the tragedy and was previously criticised in an official report into the sinking.
He was described by Tonga’s Royal Commission of Inquiry as “unfit to hold such an important position”, “evasive” and “lacking credibility”.
The QC was also criticised for failing to order an independent survey before the purchase of the ferry, which he admitted had been a “rust bucket”.
Lord Dalgety, who was a councillor in Edinburgh between 1974 and 1980, was charged with perjury and put under house arrest on his last day of giving evidence to the committee in February 2010.
Justice Charles Cato said in his ruling on the perjury allegations that Lord Dalgety’s words were so far removed from the vital issues the commission had to consider concerning the tragic ferry crash, that he did not think a guilty verdict would be a safe verdict.
He said: “It is my view that the charges of perjury must be made out plainly and that is not the case here. I rule that the Crown had failed to reach the level required under the legal standards I must apply and accordingly I discharge Lord Dalgety from the indictment.
“I do not consider that the prosecution for perjury was pursued by the police or the Crown for some improper, collateral or malicious reason and decline a stay.”
Lord Dalgety was appointed a Scottish QC in 1986 and has been a Tonga law lord since 2008.
The kingdom of Tonga is a group of 176 islands with a population of just over 100,000 people. Only 52 of these islands are inhabited by people.
The islands stretch a distance of 500 miles wide and are found off New Zealand’s east coast.
Tonga became known as the “Friendly Islands” in 1773 when Captain James Cook first visited the country.