By Ian Simpson

WASHINGTON (Reuters) - A judge on Thursday dismissed charges against a man convicted of murdering Washington intern Chandra Levy in 2001, in a sensational case that riveted the U.S. capital and contributed to the downfall of a congressman.

Ingmar Guandique, 34, had been serving a 60-year sentence after being found guilty in 2010 of murdering Levy. Guandique was facing a retrial in October.

District of Columbia Superior Court Judge Robert Morin granted a motion by federal prosecutors to drop the charges a few hours after it was filed.

The U.S. Attorney's Office "has concluded that it can no longer prove the murder case against Mr. Guandique beyond a reasonable doubt," it said in a statement.

The motion was based on information that prosecutors received within the last week, the statement said. The information was not disclosed and no other suspects were identified in the case.

Guandique's bid for a new trial was granted last year after his lawyers argued that a key witness had lied.

"Mr. Guandique has maintained since the beginning, when he passed an FBI administered lie detector test, that he did not kill Ms. Levy," Guandique's public defender, Laura Hankins, said in a written statement.

"This dismissal vindicates Mr. Guandique. Finally, the government has had to concede the flaws in its ill-gotten conviction," Hankins said.

The death of Levy, 24, and the subsequent investigation transfixed Washington, starting with her disappearance in May 2001.

A search turned up few details on her whereabouts but brought out allegations that she had had an affair with Gary Condit, then a member of the U.S. House of Representatives, who was married.

Condit, a Democrat representing California, acknowledged having a "close relationship" with Levy but said he had nothing to do with her disappearance or death.

Despite Condit's never being named a suspect, media coverage of the investigation contributed to his re-election loss in 2002.

Levy's remains were found in Washington's Rock Creek Park in 2002. In 2009, police charged Guandique, who was already imprisoned for attacking women in the same area where Levy went missing.

(Reporting by Ian Simpson in Washington, D.C.; Additional reporting by Dan Whitcomb in Los Angeles; Editing by Leslie Adler and Grant McCool)