Visually-impaired sprinters Chisomo Jeremani and Janet Shedani along with two guides and four officials were set to travel to London.
Malawi’s Paralympic Committee has blamed the country’s government and potential corporate sponsors for a lack of support.
The International Paralympic Committee could now sanction the country.
The London organisers Locog had provided some money to help fund the trip, but according to officials from Malawi it was not enough to send the full delegation, including guides for the runners.
The southern African nation was to be one of 15 debutants at the games, which will now comprise 165 countries.