Federal prosecutors have decided not to pursue a possible criminal case into how Heath Ledger obtained the powerful painkillers that contributed to his overdose earlier this year, a US law enforcement official says.

Prosecutors in the US Attorney's office in Manhattan had been overseeing a Drug Enforcement Administration probe into whether the painkillers found in the Australian actor's system were obtained illegally.

But the prosecutors are bowing out "because they don't believe there's a viable target," the official said in New York on Wednesday.

The decision follows recent reports that US actress Mary-Kate Olsen was demanding immunity before answering questions about the death of her close friend. Authorities say she was the first person called by a masseuse who found the 28-year-old Dark Knight actor's lifeless body in his Manhattan apartment.

The DEA had obtained a subpoena that could have forced Olsen if she continued to hold out. But the subpoena, issued in April, is no longer valid because it was contingent upon prosecutors pursuing the case, the official said, adding the case could still be revived if evidence of a crime emerges.

DEA investigators suspect the painkillers oxycodone and hydrocodone found in Ledger's system were obtained with phoney prescriptions or other illegal means. Oxycodone is sold as OxyContin; and hydrocodone as Vicodin.

Earlier this week, Miller insisted the Full House actress had already told the government she "does not know the source of the drugs Mr Ledger consumed".

Other drugs taken by Ledger, including anti-anxiety medication and sleeping pills, were prescribed legally by doctors in California and Texas.

The New York medical examiner's office wouldn't say what concentrations of each drug was found, but made it clear he was killed by the combination - not an excess of any one drug in particular. It is common for the DEA to investigate an overdose death with so many different drugs involved, a DEA spokesman said last month.

The masseuse discovered Ledger's body on January 22. Police say she spent nine minutes making three calls to Olsen before dialling emergency dispatchers for help, then called the actress a fourth time after paramedics arrived.

At some point during the flurry of frantic calls, Olsen, who was in California, summoned her personal security guards to the apartment to help, police said.