Rebekah Brooks has been formally found not guilty of one charge of misconduct in a public office, but she remains on trial for four further counts.
Jurors at the phone-hacking trial will still decide whether the former News of the World editor, 45, is guilty of four further offences - one count of conspiring to hack phones, two of perverting the course of justice, and one of conspiring to commit misconduct in a public office.
Judge Mr Justice Saunders, sitting at the Old Bailey, instructed the jury to formally acquit Brooks. The charge relates to an allegation that she sanctioned a payment of £4,000 to a public official for a picture of Prince William dressed as a bikini-clad Bond girl at a Sandhurst party.
The image was not published, though it led to an exclusive in The Sun in September 2006 - the tabloid Brooks edited before taking the helm at its sister paper - with the headline "Willy in a Bikini" together with a mocked-up picture of the prince wearing a green swimsuit and Hawaiian-style flowers.
The judge said a verdict of "not guilty" had to be returned for Brooks on that count.
He said: "I have decided that there is no case for Ms Brooks to answer on count four. That is the charge relating to a picture of Prince William in a bikini.
"Whether or not there is a case to answer is for me to decide."
Brooks stood and smiled as the jury foreman recorded a not guilty verdict.
Jonathan Laidlaw QC made an opening statement at the start of Brooks's defence case today, saying jurors might have found the trial hard to follow so far.
He told the court that "on occasions absolutely critical information was overlooked or left out" by the prosecution.
Mr Laidlaw said: "If there is a sense of confusion about the evidence and what it is said to relate to, that would be entirely understandable."
He told the jury that at the end of the trial, he would "have a lot more to say" about Brooks's treatment by the prosecution and the police.
Mr Laidlaw told the jury it was not for Brooks to give evidence to "make out her innocence", but that the prosecution must bear the burden of reaching a high standard of proof.
He said: "That may not be something that has emerged clearly or at all at this point."
Mr Laidlaw told the jury: "Although these allegations arose in the court of Mrs Brooks's employment, she is not being tried, is she, because she was the editor of a tabloid newspaper?
"Views, as we all understand, differ about the tabloid press, and the worth or otherwise of the tabloid press within the broad spectrum of the media.
"Neither is she on trial for having worked for Rupert Murdoch's company or for having worked her way up, literally from the bottom, through that organisation.
"She is not being tried for News International's strategy, for its policies, its influences, or its corporate views.
"Politics next. Neither is Mrs Brooks on trial for any political views she may hold, neither is she to be judged for the support that the newspapers she edited gave to one particular political party at one time or another."
The barrister told the jurors that the list was not exhaustive, but he wanted to show them how important it was that they remained focused and not distracted.
He added: "There is, isn't there, an awful lot which is going on in the background to this case and in its shadow?
"There are agendas as you can all see, being pursued elsewhere, so please just be careful and keep an open mind and stay focused upon what matters."
Mr Laidlaw told the jury it is important for them to see the ex-tabloid editor "as she is" and "begin the process of working out whether there is any truth in any of the allegations made against her".