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(Adds details, comments from lawyers, context)
BERLIN, Oct 4 (Reuters) - German prosecutors said on Tuesday they had dropped an investigation into a German comedian who was accused of offending a foreign leader after reciting an obscene poem about Turkish President Tayyip Erdogan on national television.
Comedian Jan Boehmermann read out a poem on a satirical show in March suggesting Erdogan engaged in bestiality and watched child pornography, prompting the Turkish leader to file a complaint with prosecutors that he had been insulted.
That further strained ties between Ankara and Berlin after Turkey was outraged by a resolution passed by Germany's parliament that declared the 1915 massacre of Armenians by Ottoman forces to be a genocide.
Tensions have risen at a time when Germany is relying on Turkey's help to stem the flow of illegal migrants to Europe.
The German government had given prosecutors the green light to pursue the case against Boehmermann - a move for which Chancellor Angela Merkel was strongly criticised.
But prosecutors in the western city of Mainz said on Tuesday they had not found sufficient evidence to suggest that any criminal offences had been committed by Boehmermann or anyone else involved in making or broadcasting the piece.
Under Germany's criminal code, insults against foreign leaders are not permitted but the government can decide whether to authorise prosecutors to go ahead.
Prosecutors said the right to freedom of opinion could not be guaranteed without any reservations, but pointed out that Boehmermann's recital was intended to be an example of what would constitute overstepping the boundaries of freedom of opinion rather than Boehmermann expressing his own views.
"Exaggerations, distortion and alienation are characteristics of the genre of satire and caricature," prosecutors said in a statement.
They said the recital was part of a programme that is widely known for being satirical and the well-informed audience would have understood that what was expressed in it was often exaggerated and not serious.
Daniel Krause, Boehmermann's lawyer in the Mainz case, welcomed the prosecutors' decision, saying it was "in accordance with the rule of law and had withstood any political pressure".
In a separate case, Erdogan's lawyer has filed a complaint with a court in Hamburg in a bid to get the poem banned in its entirety after a court issued a preliminary ruling in May banning re-publication of parts.
Christian Schertz, Boehmermann's lawyer in that case, said Merkel had overstepped her boundaries by calling Boehmermann's poem "deliberately insulting" and said that comment could have encouraged the Turkish government to take steps against Boehmermann. He said Boehmermann would give a statement at 1630 local time (1430 GMT) on Wednesday.
Erdogan's office did not immediately respond to a request by reporters for comment.
Turkish prosecutors have opened around 2,000 cases against people for insulting Erdogan since he became president in 2014, though he has dropped many of them since the failed military coup in July. (Reporting by Michelle Martin in Berlin and Ayla Jean Yackley in Istanbul; Editing by Andrea Shalal/Mark Heinrich)