In a statement, leader Anjem Choudary also said the group had successfully engaged with thousands of ordinary people through its website and via blogs, phone calls and emails on the reality of the conflict.
But it added: "We at Islam4UK have decided, after consultation with others including our Sheikh Omar Bakri Muhammad, that no more could be achieved even if a procession were to take place in Wootton Bassett.
"And in light of this we would like to announce today that there will no longer be a procession through this market town."