The line was made single track in the late 1960s as a cost saving measure
A campaign to improve the railway line between Kemble in Gloucestershire and Swindon has failed.
The Office of Rail Regulator (ORR) has confirmed the work to double the track will not be included in Network Rail's business plan for 2009-14.
Councillor Julie Girling of Gloucestershire County Council said the decision was "unwelcome".
"This does nothing for improving rail services and encouraging commuters off the road," said Ms Girling.
The announcement follows a campaign spearheaded by the county council and backed by commuters, businesses, MPs and other local authorities.
The ORR announcement said the case was not funded because it was judged to be outside the scope of what the government wanted for improving punctuality and capacity.
A spokesman for the ORR said the work could still go ahead within the next five years if the case was resubmitted with funding coming from elsewhere.
Kemble to Swindon is part of the Great Western main line from Gloucestershire to London Paddington.
It is a sad day for Gloucestershire
Barry King, Gloucestershire County Council
Ms Girling said: "Network Rail identified the business case for this scheme to be a good one and... the Minister for Transport Tom Harris confirmed his awareness of the underlying issues and invited the rail industry to re-submit its case."
Around two-thirds of the line is double track but it reduces to single track between Kemble and Swindon.
Gloucestershire County Council director of environment Barry King said: "The business case was overwhelming.
"It would have provided the opportunity for a more frequent and reliable service between the county, London and the Southeast, boosting Gloucestershire's economy and also providing a robust diversionary route between South Wales and London, especially when there are problems with the Severn Tunnel route.
"The ORR has ignored the 2,000 supporters that registered with our petition, our MPs, local businesses and the many local authorities that supported our campaign.
"It is a sad day for Gloucestershire."