Col. James Pohl entered a plea of not guilty for England to a charge of conspiring with Pvt. Charles Graner Jr. to maltreat detainees at the Baghdad-area prison.
The mistrial for the 22-year-old reservist, who appeared in some of the most notorious photographs from the 2003 abuse scandal, kicks the case back to the military equivalent of a grand jury proceeding.
The action came after Graner, the reputed ringleader of the abuse, testified as a defense witness at England's sentencing hearing that pictures he took of England holding a naked prisoner on a leash at Abu Ghraib were meant to be used as a legitimate training aid for other guards.
Other photos showed England standing next to nude prisoners stacked in a pyramid and pointing at a prisoner's genitals.
When England pleaded guilty Monday, she told the judge she knew that the pictures were being taken purely for the amusement of the guards.
Pohl said the two statements could not be reconciled.
"You can't have a one-person conspiracy," the judge said before he declared the mistrial and dismissed the sentencing jury.
Under military law, the judge could formally accept her guilty plea only if he was convinced that she knew at the time that what she was doing was illegal.
By rejecting the plea to the conspiracy charge, Pohl canceled the entire plea agreement.
England's plea deal was a tightly woven package, reports CBS News Correspondent Barry Bagnato. When the judge decided he could not longer accept one of her guilty pleas, the remaining threads unraveled.
Army legal expert Capt. Cullen Sheppard says it's back to square one for England.
"The charges will be returned to the convening authority, the commander III Corps, for disposition," Sheppard said.