The core group on Friday did not clear the visit in view of strong opposition in Tamil Nadu.
A crucial meeting of the Congress core group saw the PM's visit being opposed on the grounds of the Sri Lankan government not honouring commitments to address the political demands of Tamils in the northern part of the island nation.
The opposition of senior members of the core committee like finance minister P Chidambaram and defence minister AK Antony is a setback to efforts to facilitate Singh's visit to Colombo, considered to be necessary for strategic and foreign policy considerations, reports Times of India.
Though there was no formal announcement, the PM's visit to Sri Lanka for the Commonwealth Heads of Government Meeting that begins on November 15 seems almost ruled out.
While the PMO and the external affairs ministry hoped that incorporating a visit to Jaffna would help break the deadlock, none of the major political players in Tamil Nadu relented in their opposition to Singh travelling to Colombo.
This left Congress leaders from Tamil Nadu with few alternatives but to align themselves with the dominant political sentiment in the state although a few argued that not going to Colombo may not serve the interests of Tamils in Sri Lanka.
Sri Lanka has made it clear that it will see Singh's absence as a setback for ties but it is felt that President Mahinda Rajapaksa's actions have not made it any easier for the PM despite India's obvious stakes in the its immediate neighbourhood and the Indian Ocean.
There has been concern that the PM not going to Colombo may also disadvantage the newly-installed chief minister of Sri Lanka's Northern Province C V Wigneswaran, who had invited Singh to visit Jaffna.
The weight of political opinion and public sentiment in TN can't be ingnored
It is felt in some quarters that the PM's participation in CHOGM would have bolstered the position of Sri Lanka's first Tamil chief minister who won an election seen to have been fair and free.
It had also been argued that India needs to maintain its leverage with Colombo to weigh in on the behalf of Tamils and also counter what is seen as China's efforts to increase its influence among Indian Ocean nations.
But while India contends with a difficult situation in the Maldives, the weight of political opinion and public sentiment in Tamil Nadu can hardly be ignored and officials admitted that foreign policy cannot be divorced from domestic politics.
Sentiments run deep in Tamil Nadu over alleged war crimes by Sri Lankan forces against Tamils in the closing stages of the civil war in the island nation. The alleged extra-judicial killings and reluctance of the Rajapaksa government to offer a thorough investigation has inflamed sentiments in Tamil Nadu.
(With agency inputs)