David Corker, a partner at City law firm Corker Binning, which specialises in business crime and fraud, has made public details of a letter he said that he had received from the SFO concerning possible action against Clarke.

This states: ‘Following a thorough review of the evidence obtained ... it has been decided not to initiate criminal proceedings on the grounds there is insufficient evidence to provide a realistic prospect of conviction.’

Clarke was sacked in July 2014 after serving three years at the head of Tesco. His replacement, David Lewis, was informed shortly after he joined that the supermarket had previously overstated its profits by £263m, largely because of the way in which it booked early discounts to suppliers.

SFO launched its inquiry into the profit overstatement case in October 2014 and interviewed Clarke as part of the inquiry.

In September 2016, the SFO announced it was charging three former executives, Christopher Bush, managing director of Tesco UK, Carl Rogberg, the ex-finance director and John Scouler, the former commercial director in connection with the profit overstatement.

The three have each been charged with one count of fraud and one count of false accounting each. They could face up to 10 years in jail if found guilty of fraud by abuse and a maximum of seven years for false accounting.

The SFO has made no comment on the decision in relation to Clarke. Its investigation in the Tesco accounting scandal continues.