The informant said in a recent deposition that he had no evidence to back up earlier statements that Knight and former Officer David A. Mack planned the rap star's murder, according to the Los Angeles Times, which reviewed a deposition transcript for the story in its Friday edition.
The rapper, who was born as Christopher Wallace, was gunned down March 9, 1997, after a music-industry party in the Mid-Wilshire district. The case remains unsolved.
The deposition was related to a wrongful-death lawsuit against the city of Los Angeles by Wallace's estate, his mother, Voletta Wallace, and other relatives. The suit contends that LAPD officials covered up police involvement in the rapper's death, and seeks unspecified monetary damages.
It is scheduled to go to trial in U.S. District Court on June 14.
The informant, known to police as "Psycho Mike," contacted detectives four months after Wallace's death from the county jail and offered information about the rapper's killer in exchange for an early release.
His initial statements formed the basis of the theory that Knight, founder of Death Row Records, conspired with Mack to arrange the shooting. According to the scenario, a college friend of Mack's, a Southern California mortgage broker named Amir Muhammad, ambushed Wallace as his motorcade waited at a stoplight.
The informant, who described himself as a paranoid schizophrenic, picked Muhammad's picture out of a police photo lineup in 1998. Five years later, he served as an undercover operative in an FBI investigation that focused on Muhammad.