Elon Musk’s social media platform welcomes decision as a victory for freedom of speech.

The eSafety commissioner, Julie Inman, said on Wednesday that she had decided to drop the case to “achieve the most positive outcome for the online safety of all Australians, especially children”.

“Our sole goal and focus in issuing our removal notice was to prevent this extremely violent footage from going viral, potentially inciting further violence and inflicting more harm on the Australian community. I stand by my investigators and the decisions eSafety made,” Inman said in a statement.

“Most Australians accept this kind of graphic material should not be on broadcast television, which begs an obvious question of why it should be allowed to be distributed freely and accessible online 24/7 to anyone, including children.”

Inman Grant said she welcomed the opportunity for a merits-based review of her takedown notice by the country’s Administrative Appeals Tribunal.

X, formerly known as Twitter, welcomed the announcement.

“This case has raised important questions on how legal powers can be used to threaten global censorship of speech, and we are heartened to see that freedom of speech has prevailed,” the social media platform said.

X refused an eSafety notice to take down footage of the non-fatal stabbing of Assyrian Orthodox Bishop Mar Mari Emmanuel during a livestreamed sermon, arguing that blocking the content for users in Australia should be sufficient.

Prime Minister Anthony Albanese criticised Musk’s refusal to follow the notice, labelling him an “arrogant billionaire who thinks he’s above the law, but also above common decency”.

Australia’s Federal Court in April temporarily ordered X to hide the content worldwide – which the platform refused to do – but a judge last month denied an application to extend the order.

Police have charged a 16-year-old boy with “committing a terrorist act” in relation to the April 15 attack on Emmanuel, which authorities say was religiously motivated.