In its place Sri Lanka Cricket, the league's owners, will conduct the regular inter-provincial Twenty20 tournament featuring five domestic sides without involving foreign players.
An official announcement is awaited, though South Africa's Herschelle Gibbs, one of the overseas players linked with the tournament, told this website that he'd been informed of the one-year deferral.
ESPNcricinfo understands that the decision to postpone the league - which was scheduled to start on July 19 - was taken on Thursday at a meeting between the SLC's new committee and Somerset Entertainment Ventures, the league's organisers. Given the BCCI's decision not to let Indian players participate and the time crunch, both parties felt it prudent to delay the launch. A four-week window in August 2012 was identified as the best time for the tournament; meanwhile the SLC will continue to lobby the BCCI for Indian participation.
The BCCI had withheld its permission on the grounds that Somerset, which owned the commercial rights, would be handling the contracts for international players and that could lead to complications should disputes arise over payments. In order to assuage the Indian board, SLC was willing to back the Indian players' contracts so that their financial interests were protected, but that was not enough to satisfy the BCCI. There have been suggestions that former IPL chairman Lalit Modi had a hand in the event, but SLC and Somerset have repeatedly denied the allegation, as has Modi.