The body of Jean Hanlon was found in the sea off the island's capital Heraklion in March 2009, four days after she was last seen alive.
Ms Hanlon, 53, from Dumfries, had been living on the island since 2005, working in bars and restaurants in the coastal village of Kato Gouves.
The divorcee's three sons, Robert, David and Michael, have battled bureaucracy and language difficulties in their efforts to find out what happened to their mother and ensure justice is done.
However, they have now been told a committee of court officials in Heraklion has ruled there is not enough evidence to bring any charges.
Michael Porter, Ms Hanlon's youngest son, said the latest news was as devastating as when he first heard of his mother's death.
"I felt like my heart had been ripped out," said Mr Porter, a 27-year-old musical theatre performer who lives in London.
"It literally felt like the first day when they told me she was dead."
The investigation into the death of Ms Hanlon, a former hospital secretary, has been beset by problems and delays. The local coroner initially ruled she had drowned, a verdict that suggested her death was accidental.
However, months later he changed his opinion to declare that Ms Hanlon had died from a neck injury before her body ended up in the sea.
Police identified two suspects – a Greek and a Belgian who were both friends of Ms Hanlon on Crete.
The two, who insisted they were innocent, came under suspicion because of incon- sistencies in their statements, but were released after questioning.
The Herald carried out an investigation last year that revealed other potential lines of inquiry.
Ms Hanlon's diary showed her relationship with a Greek man had grown tense shortly before her death and a friend said she had complained of being followed by a man in a car on the day she died.
Her friends and family have speculated that she was killed either deliberately or in a traffic accident, with her body then placed in the sea in an attempted cover-up.
David and Michael Porter plan to travel to Crete in the coming weeks to consult their lawyer on the island about whether they can persuade authorities to re-examine the case.
"I'm really hoping we don't go over there and he says there's nothing more we can do," said David Porter, 33, a hospital porter from Dumfries. "That is my fear."
The family have insisted they will not give up their campaign.
They have set up an online petition, which has already attracted more than 800 signatures, to demand the investigation continues until justice is done.
Dumfries and Galloway Labour MP Russell Brown said he was ready to explore the possibility of British police getting involved if the Greek authorities are not willing to do any more.
He said: "Would a couple of pairs of fresh eyes looking at this maybe come up with something different or see something they had perhaps missed?"
"I want to try and examine in a bit more detail exactly what avenues are open for us."
He added: "The family must be absolutely distraught, because they know that something has gone wrong here.
"Jean has died under suspicious circumstances and whoever is responsible for that is still out there."