Prosecutors returned the case to police citing a lack of evidence, the fourth time they have done so since Indonesian police started their investigations in 2006.

East Java prosecutor Mulyono told state-run news agency Antara the main reason for the lack of progress in the case was the ongoing debate over what triggered the volcano.

"Some experts call it a natural disaster and the others said Lapindo is the cause," he said.

Mulyono added that such differences about the cause would weaken any case that went to trial.

The AFP quoted police as saying they would consider using the results of a study by foreign scientists, who found the volcano was caused by bungled gas drilling by Lapindo and not an earthquake as argued by the company, to strengthen their case.

The mud volcano - known to locals as "Lusi" - has been spewing mud since erupting to life on May 29, 2006 from the Banjar Panji-1 gas exploration well in the Brantas PSC, operated by Lapindo.

Since then, 12 villages have been affected by the spreading mud - two were completely deluged - and at least 36,000 people have been forced to flee their homes.

All attempts to stem the mudflow have failed and a recent report by the UK's Durham University and Indonesia's Bandung Institute of Technology found that Lusi is now collapsing under her own weight.

The scientists believed the subsidence - of up to 3m near the centre of the mud volcano - was due to the weight of mud and collapse of rock strata due to the excavation of mud from beneath the surface.