Afghan villagers involved in the Operation Burnham inquiry are walking away from the probe.
Book Hit & Run, written by journalists Nicky Hager and Jon Stephenson, claims villagers were killed by SAS troops in Apache helicopter attacks in 2010.
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Speaking at a press conference, their lawyer Deborah Manning says they no longer have full confidence in the process and are worn out.
The villagers said in court documents they did not make the decision hastily and had considered it over a number of months.
Hit & Run alleges six civilians were killed, and 15 injured during Operation Burnham. A three-year-old girl named Fatima was allegedly one of the casualties.
"To date, officially it's never been acknowledged what's happened to them, the death of little Fatima has never been acknowledged by any of the authorities in New Zealand," Manning said.
"That is very painful for our clients."
Documents released from August 24 and 25, 2010 show the Defence Force knew nine non-insurgents were likely killed, injured or missing, including three women, during a SAS attack on Tirgiran Valley.
The New Zealand Defence Force denies the claims.
Two hearings in an inquiry into Operation Burnham have been held so far, with a third due to be held in July.