CHICAGO • The Chicago authorities on Tuesday slammed a decision to drop all criminal charges against American television actor Jussie Smollett, who was accused of fabricating a racist and homophobic hate crime.

In a move that caught the Midwestern city's police chief and mayor by surprise, prosecutors dropped all 16 felony charges against the actor, who celebrated the outcome as his lawyers and family claimed vindication.

"I have been truthful and consistent on every single level since day one," Smollett, who is black and gay, said at a brief news conference.

"This has been an incredibly difficult time," he added, "Honestly, one of the worst in my entire life."

The 36-year-old, who was out on a US$100,000 (S$135,000) bond, was accused of masterminding a hoax attack in downtown Chicago to gain publicity and win a bigger pay cheque.

Police said he sent himself a threatening letter and hired two acquaintances to stage the attack, complete with homophobic and racial slurs, while invoking United States President Donald Trump's "Make America Great Again" slogan.

Chicago's police chief and mayor, both visibly angry, denounced the decision to drop the case and Smollett's insistence of his innocence.

"This is a whitewash of justice," Mayor Rahm Emanuel told a hastily arranged news conference, stressing that a jury had issued the 16-count indictment after viewing only part of the evidence.

The prosecutor's office has offered little explanation for suddenly reversing course.

It did not clarify whether prosecutors had changed their view on Smollett's culpability or if they had simply decided that it was not in the public interest to try the case.

"After reviewing all of the facts and circumstances of the case, including Mr Smollett's volunteer service in the community and agreement to forfeit his bond to the City of Chicago, we believe this outcome is a just disposition and appropriate resolution to this case," the city prosecutor's office said in a statement.

As recently as last month, the authorities said they had enough evidence to back up their case.

Chicago police chief Eddie Johnson said surveillance camera footage, text messages, phone records and a cashed cheque proved Smollett staged the alleged hoax to tap Americans' anxieties over political and racial divisions because he was allegedly "dissatisfied with his salary".

"I think this city is still owed an apology," Mr Johnson said on Tuesday.

The actor was accused of employing brothers Ola and Abel Osundairo, both of whom worked on TV series Empire, to carry out the alleged plan.

Smollett's attorney Patricia Holmes acknowledged that the brothers had admitted to carrying out the attack, but she accused police of using "the press to convict people before they're tried in a court of law".

The initial news of the attack had prompted widespread sympathy for Smollett and outrage over the nature of the alleged crime. But the star was written out of the last two episodes of the most recent season of Empire - a musical soap opera set in New York but filmed in Chicago - amid uproar over the accusations against him.

Fox producers said on Tuesday they were "gratified that all charges against him have been dismissed", but would not comment on whether he would return to the show.

AGENCE FRANCE-PRESSE