"I am very disappointed with the outcome and feel that I have no option but to withdraw my offer," Morgan said in a statement issued by his company.
"I am a proud supporter of Liverpool FC but feel that the uncertainty and constant speculation surrounding its future is undignified for the club and its fans.
"The proposal would have guaranteed a large capital injection to take Liverpool Football Club forward, it was only ever done with the best interests of the club at heart and would have given the ordinary fans an opportunity to participate in ownership of their club," he added.
But there is still a great deal of negotiation to do before the Thai deal is done.
"There definitely won't be any signing this Friday, Saturday or Sunday," confirmed Thaksin.
"But we are trying to wrap up the deal next week because we don't want to see it drag on," he told reporters.
In addition to the 30% stake in the club the Thais want two seats on the Liverpool board while the club are offering only one.