Chief prosecutor Krister Petersson presented his decision at a press conference on Wednesday morning, attended by The Local and several other media outlets but held online due to the coronavirus.
Engström, who worked at insurance company Skandia close to the scene of the murder, was questioned as a witness in the early days of the investigation. But he only emerged as a potential suspect a few years ago.
He died in 2000, which means that he cannot be charged. The investigation will therefore be closed, said Petersson.
Swedish forensic police have tested 788 guns as part of the hunt for the murder weapon, but they have not been able to link one to bullets found at the scene of the murder, said police investigator Hans Melander.
Police started investigating 'the Skandia man' as a possible suspect in 2017. His witness statement did not quite fit with other witnesses on the scene, said Melander. At the time of the murder he was mainly dismissed as an unreliable witness who wanted to overstate his own importance, but police now think he killed Palme.
Prosecutor Krister Petersson at the online press conference on Wednesday. Photo: Stina Stjernkvist/TT
One of the main questions has been whether the perpetrator acted alone or was part of a wider conspiracy.
“We have not been able to find anything that supports a conspiracy, but it cannot be entirely dismissed,” said prosecutor Petersson.
The ‘Skandia Man', Stig Engström has been named as the suspect in the murder of Olof Palme.https://t.co/6wuoHML9mm
— James Savage (@SavLocal) June 10, 2020
Petersson stressed that the case will not be brought to court due to Engström's death, which means that he will never be cleared nor convicted, and there is no forensic evidence to tie him to the murder or a weapon.
However, he said that some of the incriminating factors included that Engström's clothes at the time matched witness descriptions of the alleged killer, that none of the other witnesses really remembered seeing him at the scene of the crime despite his own assertions that he was a key witness, and that his statements about how he himself had acted at the time of the murder in parts matched the killer's movements.
It is also known that Engström had access to weapons and disliked Palme.
The Palme murder is the most long-running and expensive investigations in Swedish history, and numerous theories have been presented along the way – in the media as well as by prosecutors and police. Asked by The Local whether they believed that the conclusion presented on Wednesday would be accepted by the general public, Petersson and Melander said they understood that other theories would continue to thrive.
“My task as a prosecutor is to try to present evidence in order to prosecute. We have arrived at the conclusion that we have enough information that I would at least use coercive measures with respect to this perpetrator, but as the perpetrator is dead we cannot turn to a court,” said Petersson.
“We can't have this issue tried and we hope that our conclusions will be accepted by the general public, but I am not so stupid I don't understand that different conspiracy theories will keep afloat in the public domain the way they have done over the past 34 years. But we have a conclusion that we feel that we can stand behind.”
Melander added: “I'm fully convinced that there are lots of people who have other opinions, different from ours, and who are prone to believe other solutions, but just like Krister said these are our conclusions and this is what we believe in.”
Palme's three sons said in a joint statement on Wednesday that they found the prosecutor's conclusion “convincing”. “Against this background, we consider it a reasonable decision to close the preliminary investigation. Of course, we are disappointed that conclusive forensic evidence cannot be presented.”
The charismatic Social Democrat premier Palme was gunned down in the street on February 28th, 1986, after leaving a Stockholm cinema with his wife, a killing that sent shockwaves through Sweden.
The gunman ran off with the murder weapon, and despite more than 10,000 people being questioned and more than 130 people claiming responsibility for the crime, the case was never solved.
Petersson took over the investigation in 2017, and told Swedish media earlier this year that he would bring the case to a conclusion this summer.
Huge efforts have been made to track down Palme's killer in the past three decades. Sweden even removed the statute of limitations for murder cases back in 2010, partly so that the investigation could continue.
Police were criticised for their actions in the early stages of the murder probe, including failing to cordon off the scene promptly, which could have meant potential forensic evidence was destroyed. The bullets were found by a member of the public, and the gun used in the murder was never found.
Over the years, there have been many theories about what may have happened, which have suggested both individuals and groups as potential perpetrators.
A man named Christer Pettersson, who had a previous conviction for manslaughter, was in 1988 convicted of the murder after Palme's wife Lisbeth identified him in a lineup. But he was later acquitted by a court of appeal, and died in 2004.