POTSDAM, Germany — Germany is dropping its pursuit of a ban on Scientology after finding insufficient evidence of illegal activity, security officials said yesterday.

Domestic intelligence services will continue to monitor the group, officials said.

The German branch of the Los Angeles-based Church of Scientology has been under observation by domestic intelligence services for more than 10 years. Top security officials asked state governments in December to begin gathering information on whether they had sufficient grounds to seek a ban.

The Church of Scientology welcomed the ministers' decision to stop seeking a ban as the "only one possible."

"There never was a legal basis to open such proceedings," said Sabine Weber, a spokeswoman for Scientology in Germany.

Scientology called on officials to end the observation, and what it called "the discrimination and the harassment that go along with it."

Germany has said it considers Scientology to be in conflict with the principles of the nation's constitution, calling it less a church than a business that uses coercion to take advantage of vulnerable people.

A recent government report on extremism charged that Scientology "seeks to limit or rescind basic and human rights, such as the right to develop one's personality and the right to be treated equally."

"This organization pursues goals — through its writings, its concept and its disrespect for minorities — that we cannot tolerate and that we consider in violation of the constitution. But they put very little of this into practice," said Erhart Koerting, Berlin's top security official. "The appraisal of the government at the moment is that (Scientology) is a lousy organization, but it is not an organization that we have to take a hammer to."

Interior Minister Wolfgang Schaeuble and his counterparts from Germany's 16 states agreed yesterday that there was not enough proof to justify opening proceedings for such a ban but domestic intelligence services will continue to monitor Scientology's activities.

"Before we open preliminary proceedings (leading to a ban), we need concrete evidence of unconstitutional activity," August Hanning, a Schaeuble deputy, said. "The security agencies are predominantly of the opinion that there is not sufficient evidence of this."

The Church of Scientology has battled to end the surveillance, saying it is an abuse of freedom of religion, and the U.S. State Department regularly criticizes Germany for the practice in its annual Human Rights Report.

Scientology was founded in 1954 by the late science fiction writer L. Ron Hubbard. It first set up in Germany in 1970 and officials estimate it has some 5,000 to 6,000 members here.

According to the 2007 annual report of the German agency that tracks extremism, Scientology "seeks to reduce or deny basic constitutional and human rights, such as the right to human dignity, the right to self-fulfillment and the right to equal treatment."