Prince Harry will not be sent to Iraq because of the "unacceptable risks", the head of the British army has said.
The prince has expressed a wish to be involved in active service
General Sir Richard Dannatt said the prince's deployment would pose a threat to him and those serving alongside him.
The announcement, which represents a U-turn on an earlier decision, was made amid reports militant groups in Iraq planned to kill or kidnap the prince.
Clarence House said Prince Harry was "very disappointed" but would not be leaving the Army as a result.
Last month the Ministry of Defence had said the prince would be heading to Iraq as an armoured reconnaissance officer in the Blues and Royals regiment.
But on Wednesday, the general said he had reached his decision following a visit to the region at the end of last week.
"There have been a number of specific threats, some reported some not reported, which relate directly to Prince Harry as an individual.
"These threats expose not only him but also those around him to a degree of risk that I now deem unacceptable."
General Dannatt said he knew Prince Harry would be extremely disappointed and that his soldiers would miss his presence in Iraq.
Harry would have been deployed with his regiment to Basra
He said the prince had proved himself as an officer of "determination and undoubted talent - and I do not say that lightly".
The army chief did not rule out deploying the 22-year-old prince to the region in the future and paid tribute to all British service personnel deployed around the world.
BBC defence correspondent Paul Wood said there had been a number of "specific threats", but what the Army was most concerned about was the possibility that Iran would use its security services for an attack on the prince.
Reg Keys - whose son Thomas was killed while on active service in Basra in 2003 - said he found the decision distasteful and questioned whether insurgents could have told the prince apart from other service personnel.
"It would appear that Harry's life is more valuable than my son or the other nearly 150 service personnel who've given their lives," Mr Keys added.
A Clarence House statement said: "Prince Harry is very disappointed that he will not be able to go to Iraq with his troop on this deployment as he had hoped.
"He fully understands and accepts General Dannatt's difficult decision and remains committed to his army career.
"Prince Harry's thoughts are with his troop and the rest of the battle group in Iraq."
Asked if Harry would quit the Army as a result, a spokesman replied: "Absolutely not."
Former British army commander Colonel Bob Stewart told BBC News 24 the decision would have been taken very reluctantly.
He said: "The chief of the general staff has actually made such a decision with extreme reluctance; I know that, he's a personal friend and I know exactly the way he's feeling."
Harry would have been the first British royal to see action since his uncle, Prince Andrew, served as a helicopter pilot during the Falklands conflict in 1982.
A Downing Street spokesman said: "It's an operational decision taken by the military which we of course respect."
But Republic, a group which campaigns for an elected head of state, said the decision showed that "the prince should never have joined the Army".
In a statement it said: "This is a scandalous waste of taxpayer's money, brought on by the Windsor family's obsession with linking themselves to the military."
Former Conservative Defence Secretary Michael Portillo also criticised the MoD for "terrible vacillation" over the issue, and Tory MP Desmond Swayne - a former Territorial Army officer in Iraq - said the decision was a victory for Iraqi insurgents.