The British Transport Police (BTP) said the men, aged 21 and 40, had been questioned over what was initially feared as a terrorist attack on Friday evening but will face no criminal proceedings.
"There are no criminal proceedings against them. They have not been arrested or charged," a BTP spokesperson said.
The incident, believed to have involved an altercation between the two men on the platform of Oxford Circus underground train station, caused widespread panic as people rushed out of the station amid rumours of shots being fired.
Armed officers from the Metropolitan Police along with BTP officers had rushed to the scene after numerous emergency calls to the 999 number from members of the public, many of whom reported hearing gunshots.
People were told to seek refuge in nearby buildings and shoppers were barricaded inside stores on Oxford Street as armed police officers were deployed.
"Given the nature of the information received, the Met responded in line with our existing operation as if the incident was terrorism, including the deployment of armed officers," the Met Police had said.
Britain's terror threat level is set at severe, which means an attack is highly likely and security forces are trained to treat any reports of feared attacks as terrorist incidents.
Officers are still trawling through CCTV footage and speaking to witnesses in an attempt to establish a picture of exactly what happened on Friday, but no further suspects are being sought.
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