Google Street View does not contravene the UK Data Protection Act, says the Information Commissioner's Office (ICO).
"There is no law against anyone taking pictures of people in the street as long as the person using the camera is not harassing people," said the ICO's David Evans.
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The privacy watchdog is among the organisations and individuals that have raised objections to the service since then.
The ICO has told Privacy International that the removal of the Google service would be "disproportionate" to the relatively small risk to privacy.
After consultation with the ICO in 2008, Google agreed to blur people's faces and car registration plates.
The ICO said it was satisfied that Google is putting in place adequate safeguards to minimise any risk to the privacy and safety of individuals.
"As a regulator, we take a pragmatic and common sense approach," said Evans.
The ICO will be watching closely to ensure Google continues to respond quickly to deletion requests and complaints, he said.