Prime Minister David Cameron had asked Bruce Carr QC to review the legislation governing industrial disputes.
But yesterday Mr Carr announced that he would recommend no changes.
In a statement, he said that he was concerned about the ability of the review "to operate in a progressively politicised environment" in the run-up to next year's General Election.
His inquiry was set up after accusations the Unite union tried to bully Grangemouth managers and their families, using a tactic known as "leverage".
At the time Mr Cameron called the allegations shocking, adding: "No-one has a right to intimidate, nobody has a right to bully, nobody has a right to threaten people's families, no-one has a right to threaten people in their homes."
In June the owners of the plant, Ineos, asked ministers to make it illegal for unions to intimidate senior executives during disputes, in a submission to the Carr review.
The company also wanted unlimited damages to be available for the illegal targeting of individuals, suppliers and customers, and it called on the Coalition Government to extend the strike notice period from a week to three weeks, to limit what it said were potential safety risks.
The TUC have accused Mr Cameron and the Conservatives of using the row over tactics to set up a politically motivated inquiry, driven by their political hatred of unions.
Union leaders now want the Tory party to cover Mr Carr's fee, reported to be around £1,500 a day, and other expenses.
TUC General Secretary Frances O'Grady said: "The Conservative Party should now repay to the taxpayer the costs."
In his statement Mr Carr also said he would produce a scaled-back report later this year.