By Daniel Wallis
March 6 (Reuters) - Prosecutors in Nevada dropped a murder charge on Friday against a woman who spent more than three decades behind bars for the crime, saying newly found DNA evidence cleared her of slaying a 19-year-old nursing student almost 40 years ago.
A judge threw out the conviction against Cathy Woods, 64, in September after DNA evidence from a cigarette butt at the scene of the fatal stabbing near the University of Nevada campus in Reno was matched to a prisoner in Oregon.
The judge freed Woods on bail and told her to appear for a retrial in July, but Washoe County District Attorney Chris Hicks said on Friday that his office is dismissing the case.
"It is our belief that the newly discovered DNA evidence and the continued investigation of this case exonerate Cathy Woods of the murder of Michelle Mitchell," Hicks said in a statement.
Nursing student Mitchell disappeared after her car broke down near the campus on Feb. 24, 1976. Her body was later found in a garage with her hands tied and multiple stab wounds to her throat.
No one was arrested, and three years later Woods told staff at a psychiatric ward in Shreveport, Louisiana, where she was a patient, that she murdered a 19-year-old named Michelle in a garage near the college in Reno three or four years previously.
She said the same to Reno officials who visited her, and a jury found her guilty of the murder in 1980.
The Nevada Supreme Court reversed that conviction, but she was found guilty of the murder by a second jury in 1985. Both times, Woods was sentenced to life in prison.
Her lawyers requested in 2010 that DNA from the scene be tested, and a Marlboro cigarette butt found close to the body contained an unknown male's DNA profile.
That profile matched one linked to two unsolved murders from California in early 1976, and in July last year it was matched to Oregon inmate Rodney Halbower, prosecutors said.
Halbower, who served time in Nevada for an unrelated crime and whose DNA was recorded when he was transferred to Oregon, is now charged with the two California murders, Hicks said.
He said he did fault any of the parties to the original investigation, who had been presented with detailed confessions to a vicious, unsolved murder.
"They did not have the incredible tool of DNA," he said. (Reporting by Daniel Wallis in Denver; Editing by Doina Chiacu)