Northumberland, Tyne and Wear NHS Foundation Trust has said it is carrying out a "full internal investigation" following the court proceedings against him.
The 19-year-old, who had been released from a psychiatric hospital in August 2017, killed One Stop shop staff member Joan Hoggett while she was working in the store in Sea Road, Fulwell, on the night of Wednesday, September 5, last year.
Mountain, of Heaton Gardens, South Shields, had been standing trial at Newcastle Crown Court after denying murder.
However, today the prosecution announced it was dropping the case after its expert witness's evidence aligned with that of the defence that Mountain had suffered psychosis.
Mountain had previously admitted a charge of manslaughter on the grounds of diminished responsibility and will be sentenced next Friday.
Today, Gary O’Hare, executive director of nursing and chief operating officer at Northumberland, Tyne and Wear NHS Foundation Trust said: “We would like to offer our sincere and heartfelt sympathies to Joan Hoggett’s family and friends at this sad and difficult time.
"We are carrying out a full internal investigation. As the criminal proceedings have not yet concluded we are unable to comment further.”
During the court hearings, the jury - today instructed to return a not guilty verdict on the murder charge by a judge - were told Ethan had told those involved in his treatment: "Someone will get killed and then I will get arrested.”
He had made the chilling prediction, which then turned into a brutal, bloodied reality.
At today's hearing, prosecutors said they now agreed with defence counsel Mountain is a paranoid schizophrenic and “very ill”.
Details of Mountain’s troubled past emerged during the course of the trial.
He had been diagnosed with ADHD when he was just 12 and was detained in a psychiatric hospital between June and August 2017, where he made chilling revelations about his thoughts.
Mountain had told staff: “Everyone thinks that I am a good person, that’s because of the ability to charm people and they trust me.
“You may think that’s scary, someone having the thoughts I am having, to trick someone into thinking I’m a nice person when inside I want to seriously hurt them.”
Mountain, who said he started taking cannabis at age 15 but cut back because he experienced “profound hallucinations”, claimed to have harmed animals in the past and told medics: “Someone will get killed and then I will get arrested.”
The court heard Mountain was on a “low dose” of anti-psychotic medication when he was released from the psychiatric hospital in August 2017, a day before his 18th birthday, and started drinking vodka heavily.
Mountain claimed he had stopped taking his prescribed medication “about a week before” he attacked Mrs Hoggett and was due to see a psychiatrist the following month.
During interview after the attack, Mountain told a psychiatrist he had been hearing voices and had had an argument with his mother just before the killing.
He added: “She was concerned I was drinking too much, I was concerned that the doctors would throw me back in hospital.
“The voices were saying I would be crazy and I would be sectioned.”
Mountain said he had limited recollection of the actual attack on Mrs Hoggett.
He told a psychiatrist: “I can’t remember physically doing it, I just remember walking to the shop, thinking people were talking about me and then I was coming out of the shop, covered in blood.
“I knew I had done something wrong, I went to the park and began self-harming.”
Earlier in the trial, consultant forensic psychiatrist Ramneesh Puri told jurors that Mountain had been hospitalised and diagnosed as “acutely psychotic” between June and August 2017.
Mountain had been admitted to hospital due to his paranoid thoughts and thoughts of “harming others with an axe, hammer, knife and belt”.
During his stay, Mountain described himself as a “bad person” and told staff he would “end up in Broadmoor”.
Dr Puri told the court: “He said he needed to remain in hospital in order to prevent him harming anyone.”
The jury heard that while in hospital, Mountain had confessed to “stalking people in parks” and said he “wanted to harm them but never did”.
The court heard he had said he would kill himself rather than hurt anyone else and was “distressed” by his own thoughts.
While in prison after the killing, he was assessed as being “very psychotic”.
When police searched Mountain’s home after the killing, they found handwritten “kill plans”.
A selection of documents, including the “plans” as well as notes on psychology and “cold case” American killings, were recovered from a bedroom at his home.
Jurors were shown an envelope which contained handwritten words on each side.
One side, which included the words “Kill plan A”, was about removing gun powder and fuses from fireworks, sticking the fuses together, putting them in a container and getting “lots of nuts and screws”.
A paper bag of nails was recovered from the house.
The court heard the other side of the envelope, which had had the words “Kill plan B” written on, said: “Get petrol, get a bike, get ski masks and knives.
“Pour petrol on all the back garden. Light. Climb fence, get on bike, drive around front pour petrol through door flap and on windowsill, then run.”
The jury also heard police also found lists of cars and their registration numbers and descriptions such as “black short hair”.
They were also shown handwritten notes about psychology and mental illness which were found during the search of the house.