British Wrestling will only be allowed to send one athlete to London 2012 after the British Olympic Association (BOA) reduced their allocation of host-nation berths.
The sport was provisionally awarded three last year, but failed to achieve agreed performance targets.
"There is a standard across Team GB that must be upheld," said Team GB Chef de Mission Andy Hunt.
The sole Olympic place has been awarded in the women's -55kg division.
Scottish wrestler Jayne Clason filled that position at the recent Olympic qualifier in Helsinki and is the reigning British Champion in that weight class, although Ukraine-born British passport-seeker Olga Butkevych competes as an -59kg wrestler and could be a potential alternative.
-96kg British Champion Leon Rattigan, who was fifth at the 2009 World Championships and attained a bronze medal at the 2010 Commonwealth Games in Delhi was thought to be a leading candidate for a host-nation berth, despite a dip in form over the last 18 months.
"Criteria was top six in tournament, I finished seventh, but it wasn't enough in the end, thanks for all of the support #dreamover" he tweeted.
"The OQS Panel takes very seriously the responsibility of making certain that in those sports where Host Nation Qualification Places will be utilised that the athletes competing for Team GB will be in a position to deliver a credible performance on the field of play," said Hunt.
"Equally, it is essential that those sports are fully prepared to make the most of the unprecedented opportunity of competing in a Home Games and deliver a meaningful participation legacy."
British Wrestling chief executive Colin Nicholson admitted the decision was a blow for the sport.
"Obviously we're disappointed by their [BOA's] decision and we await for a written detailed output from the meeting," Nicholson told BBC Sport.
"Money has been invested in the programme, but we have used that money positively to build an elite performance culture at Manchester in the British Wrestling academy and that remains - that's a platform upon which to build our programme for Rio 2016."
The decision of the four-strong Olympic Qualification Standards (OQS) panel which included BOA Chief Executive Andy Hunt and Sir Clive Woodward comes after a year of almost constant controversy.
In April 2011 several former athletes came out in protest against the recruitment of foreign training partners, who they alleged were in fact taking the places of British wrestlers in competitions.
There were also calls for leading figures within the sport's management to quit and earlier this month English Commonwealth Champion and Olympic medal hope Myroslav Dykun tested positive for a banned substance.
Shortly afterwards they were called for urgent crisis talks with the BOA after rumours Ukraine-born former European Champion Olga Butkevych was likely to be named in their Olympic team.
On the mat athlete performances have also been anything but positive.
Despite achieving three medals at the last Commonwealth Games, British wrestlers failed to achieve BOA approved targets of a top-sixteen finish at the 2011 World Championships, a top-eight place at this year's Europeans or a top-six position at an Olympic qualification tournament.
However, speaking ahead of the BOA's ruling British Wrestling's performance director Shaun Morley insisted there were reasons for optimism.
"I don't think we are going to win any medals, my realistic expectation is that we can get somebody into the top six at the Olympics," he said.
"If we achieve that to me it will represent significant progression for a sport that only a minority of people in this country are involved in."
-96kg British champion Leon Rattigan has achieved a few international victories of late, but that was not enough to convince the BOA Olympic selection panel that he should be allowed to represent Team GB at London 2012.
The OQS Panel also stated that the sport needed to do "more work" to ensure a meaningful post-Games legacy for wrestling.
This is to include much greater emphasis on increasing participation at the grass-roots level in the UK and creating a clear performance plan to qualify athletes by right for the Rio 2016 Olympic Games.
The names of the -55kg athlete who will compete for Team GB at London 2012 is expected to be revealed by 1 June.