A jury trying Metropolitan Police Constable Alex MacFarlane, who admitted calling a black suspect a "n*****", has been discharged after failing to reach a verdict.
The defendant, a policeman for 18 years, was charged with causing racially aggravated intentional harassment, alarm or distress to Mauro Demetrio, 22.
The officer, 53, admitted telling Demetrio: "The problem with you is you will always be a n*****."
But he claimed it was not intended as racist abuse and he only used the term - which was recorded on the suspect's mobile - because Demetrio had done so first as he was taken into custody on suspicion of drink or drug-driving in east London on August 11 last year.
The jury of five men and seven women at Southwark Crown Court retired to consider its verdict on Wednesday.
After more than a day's deliberation, the jury foreman told Judge Michael Gledhill QC there was no manoeuvrability on reaching a verdict. The case will be retried on Monday with a new jury.
The trial had heard that Demetrio had become "abusive" to officers after he claimed to have been strangled and pushed up against the window of a police van following his arrest.
Demetrio was not charged following the arrest. He used his mobile phone to record the exchange with officers.
In a police interview read to the court, MacFarlane admitted getting into a "slanging match" with the suspect and said he remembered Demetrio swearing at police. "I have to confess it became a bit unpleasant," he said.
Demetrio, of Beckton, east London, said the officers, who were part of a public order unit, appeared "agitated" at the time of his arrest because of rioting which had swept London.