Helen Moss, who was the hospital's director of nursing from 2006 to 2009, during the worst of the failings, has been told she has "no case to answer".
The conclusion came on the day that a report into the deaths at Stafford laid the blame on a box-ticking culture that put profits ahead of patient care.
Robert Francis, QC, concluded a public inquiry into the "disaster" at the hospital by making far-reaching recommendations on nursing, inspections and the culture of the NHS.
Mr Francis was expected to conclude "routine neglect" became the norm because of a culture of "fear, bullying and secrecy".
It was expected the report will recommend hospitals should face tough new scrutiny. The move forms part of an overhaul of the array of regulatory bodies that failed to detect failings at the trust.
It is estimated as many as 1,200 people might have died at the hospital in the period up to 2009.
The Nursing and Midwifery Council has refused to say how it had reached the decision on Dr Moss.
Julie Bailey, of the campaign group Cure the NHS, which helped to expose the scandal, said the decision to clear the director of nursing was a disgrace.
Follow live coverage of the Stafford Hospital inquiry findings from 1130am today on Expressandstar.com