It was one of the biggest French murder mysteries of the past 100 years: a killing with no corpse and a convicted murderer who always said he was innocent.

Guillaume Seznec, a Breton sawmill owner, was sentenced to a life of hard labour in a penal colony in French Guiana in 1924 for murdering a dignitary and friend whose body was never found.

He insisted he was innocent and over decades new theories have emerged of a curious saga of illegal rackets in American Cadillacs and a possible police set-up by a French officer who later joined the Gestapo during the Nazi occupation. The case inspired numerous books, while Seznec's family fought to force the courts to acknowledge a miscarriage of justice.

But yesterday, amid intense interest from the media, lawyers and historians, the court of revision refused to posthumously clear Seznec's name. Last year the state prosecutor concluded that fresh evidence cast doubt on the guilty verdict. But judges insisted there were no new facts leading them to doubt Seznec's conviction.

"It is shameful what you are doing!" shouted Seznec's grandson, Denis, 59, from the gallery, accusing the courts of wasting a chance to prove the justice system was able to admit its mistakes.

The case comes as the legal system is reeling from the failures of a case in Outreau in northern France where several innocent people were jailed for years for paedophile offences, with some having their children taken into care. Some of those finally acquitted in that case were present in court with the Seznec family yesterday.

In May 1923 Seznec left Brittany for a trip to Paris with a friend, Pierre Quemeneur, a woodcutter and local official. They were to negotiate with Boudjema Gherdi the sale of 100 Cadillac cars, left by US troops after the first world war. But their car broke down several times and Quemeneur decided to take the train alone. He never arrived in Paris and his body was never found. The following month his suitcase was found at Le Havre with a note in which Quemeneur promised to sell his land to Seznec. Seznec's family argue the document was faked.

At Seznec's trial lawyers claimed that Gherdi did not exist, and that Seznec had planned Quemeneur's murder to take over his land. But Gherdi was later proved to exist. He was a car trader and an informer for a police officer on the case, inspector Pierre Bonny.

The Seznec family questioned whether the police had framed Seznec to cover up a racket in American cars. In 1993 an 85-year-old former shopkeeper retracted statements implicating Seznec, saying she had been coerced by the police.

Bonny joined the French Gestapo during the occupation and was shot by firing squad in January 1945. On the eve of his execution, his son Jacques said he confessed to having sent an innocent man to a penal colony.