WASHINGTON — During the corruption trial against former Alaska Sen. Ted Stevens, federal prosecutors were chastised by a judge for letting a witness leave town. They got in trouble for submitting erroneous evidence and were reprimanded for failing to turn over key witness statements. An FBI agent has since complained about the prosecution team's misconduct.

Yesterday, Attorney General Eric H. Holder Jr. announced that he has had enough. The Justice Department asked U.S. District Judge Emmet Sullivan to dismiss the case after learning that prosecutors had failed to turn over notes that contradicted testimony from their key witness.

The discovery by a fresh team of lawyers and their acknowledgment that the material should have been shared with the former senator's defense team, led Holder, a former public corruption prosecutor, to conclude that the department's biggest public corruption case in a decade could not be salvaged.

Holder's decision invites tough new scrutiny on a unit that polices corrupt officials and could foreshadow a shake-up in the way the government prosecutes such cases, according to lawyers who work on such cases.

Current and former department lawyers predict an overhaul that will sweep aside senior leaders in the Public Integrity Section, two of whom were cited for contempt of court by the Stevens trial judge.

That ruling triggered an internal ethics probe that has produced a situation in which prosecutors and FBI agents who worked side by side on the case are blaming each other, sources said.

"I always knew that there would be a day when the cloud that surrounded me would be removed," Stevens said. "That day has finally come."

Stevens, 85, was convicted in October, eight days before Election Day, of seven counts of making false statements on financial disclosure forms to hide about $250,000 in gifts and free renovations to his Alaska home.

The Justice Department filing yesterday means that he can no longer be prosecuted for any alleged crime stemming from those allegations.