The Olympic torch will not pass through Taiwan because negotiators could not resolve differences with the Beijing authorities, officials have confirmed.
China and Taiwan have been wrangling over the issue for months
The two sides disagreed over the route the torch should take on its way to the Beijing Games in 2008.
Taiwanese officials also objected to Chinese insistence that the use of Taiwan's flag and national anthem be limited at torch-related events.
China described the outcome as a "vile precedent".
Beijing views Taiwan as part of its territory. They have, however, been separately governed since the end of the Chinese civil war in 1949.
Beijing has planned a lengthy route for the Olympic torch. It will pass through more than 20 cities and ascend Mount Everest on its way to the Chinese capital.
In the original schedule, the torch was to arrive in Taiwan from Vietnam and then go on to Hong Kong.
But Taiwanese officials had argued that this implied that Taiwan was part of China and had asked for the route to be changed.
Chinese officials had also asked that only songs and flags approved by the International Olympic Committee (IOC) be used at events related to the Olympic torch in Taiwan - ruling out use of the Taiwanese national anthem and national flag.
Taiwan's Sports Minister Yang Jong-her said the two sides "were not able to reach consensus over the arrangement of the relay after more than one month of discussions".
"We deeply regret the result," the minister said.
The Beijing organising committee said Taipei had "violated the Olympic Charter and manipulated the arrangements for the Taiwan leg of the relay for political purposes".
This created a "vile precedent of an International Olympic Committee member refusing the torch relay within its jurisdiction," the committee said on its website.
The IOC had set 20 September as a deadline for resolving the dispute, Taiwanese officials said.