Great Britain cycling sprint director Shane Sutton called the decision to disqualify Jamie Staff from the men's keirin "a disgrace".
Staff was relegated to last place in his second-round heat despite finishing in the top three to reach the final.
"They said he impeded the other guy's progress," Sutton said. "Unfortunately you don't have any form of appeal. For him to go out like that is a disgrace."
Staff added: "I'm disappointed and I'm angry but life goes on."
Staff, the keirin world champion, was adjudged to have come off the banking too steeply as he hit the front with two laps to go.
British cycling team leader David Brailsford believes the disqualification cost Britain a fifth cycling medal of the Games after golds for Chris Hoy and Bradley Wiggins, silver for the team pursuit quartet and bronze in the madison.
"It was a really galling decision," Brailsford said. "Technically I guess it was within the rules but it's a
really harsh decision.
"He has dedicated all his life and made a lot of sacrifices to get to this point. He was in
the final and would definitely have got a medal."
Australia's Ryan Bayley went on to claim the gold medal.
Staff had earlier won his first-round repechage heat, but Britain's other representative Ross Edgar went out after finishing fourth in the same race.