Pakistan Cricket Board (PCB) chairman Ijaz Butt withdrew on Wednesday allegations of match-fixing against the England team during the third One-day International at the Oval on September 17.
Butt had been threatened with legal action from the England and Wales Cricket Board (ECB) unless he unreservedly apologised for his suggestion that the England team had taken bribes to lose the match.
The withdrawal in a joint statement from the two boards followed an announcement from the International Cricket Council (ICC) that Pakistan test captain Salman Butt had appealed against a suspension for spot-fixing.
The ICC said pace bowlers Muhammad Amir and Mohammad Asif had yet to appeal against the suspensions which followed an investigation into newspaper reports that they had arranged for deliberate no-balls to be bowled in the Lord's test last month. All three have said they are innocent.
Ijaz Butt's comments came after the suspensions and an ICC announcement that it was investigating Pakistan's innings at the Oval after receiving information from a British newspaper about an allegedly suspicious scoring pattern.
Butt and other Pakistani officials were angered by the second decision and, in a television interview before the fourth match at Lord's, Butt said there had been "loud and clear talk in bookies" circles that some English players were paid enormous amounts of money to lose (the Oval) match".
Although Butt said in a later radio interview with the BBC that he was only passing on information he had received from bookmakers, the ECB called the comments defamatory and England captain Andrew Strauss said his team had considered pulling out of the Lord's game.
Last Thursday, the day after England had won the one-day series 3-2, the ECB said it would take immediate legal proceedings against Butt unless he gave a "full and unreserved apology".
Butt said he wished to withdraw his allegations on behalf of himself and the PCB.
"It is regrettable that there was a misunderstanding arising from my comments," Butt said.
"I would like to make it quite clear that in the statements which I made that I never intended to question the behaviour and integrity of the England players nor the ECB nor to suggest that any of them were involved in any corrupt practices or in a conspiracy against Pakistan cricket," he added.
Butt's apology was welcomed by the ECB and the England team who said they now regarded the matter as closed.
ICC chief executive Haroon Lorgat said an independent tribunal would be convened as soon as possible to hear Salman Butt's appeal.