The Sri Lanka Premier League (SLPL) was scheduled to kick off on July 19 with players from Australia, India, New Zealand, Pakistan and the West Indies, but foreigners demanding hefty fees are now unlikely to be included.
"The thinking at the moment is to go ahead with only local players," a source close to Sri Lanka Cricket told AFP.
He said a decision by India to ban its players from taking part in the SLPL, which is modelled on the successful Indian Premier League (IPL), had undermined the viability of Sri Lanka's venture.
The involvement of Indian stars in the event was seen as essential to enhance television audiences in the lucrative Indian market.
Sri Lanka co-hosted the 2011 World Cup at a cost of $69 million, far in excess of its projected budget amid allegations of financial mismanagement. India was opposed to participating in the SLPL after media reports that the tournament had links to Lalit Modi, the sacked former boss of IPL.
Sri Lanka has denied the involvement of