Attorney General Dominic Grieve has said it would be "inappropriate" for him to review the decision to prosecute an SAS sergeant for illegal possession of a weapon.
Defence Secretary Philip Hammond wrote to Mr Grieve asking him to examine if proper consideration had been given to whether a prosecution of Sgt Danny Nightingale was in the public interest before the case was brought to court martial.
Sgt Nightingale is serving an 18-month sentence in military detention after pleading guilty to having a prohibited firearm and ammunition.
The father of two, who served in Iraq and Afghanistan, suffers medical problems which affect his memory and says he did not remember having the weapon, which was a gift from Iraqi soldiers he had been training.
A spokesman for the Attorney General's office said: "It would be inappropriate for the Attorney General to review either the decision to prosecute or comment on the appropriateness of the sentence.
"That is a matter for the Court Martial Appeal Court, in due course."
Sgt Nightingale's wife Sally said: "I was extremely hopeful of a early decision on Danny's fate after the announcement of the Defence Secretary, who asked for a review of his case, so I am very disappointed that the Attorney General has refused to do so."
"The appeal is being lodged tomorrow and I hope that he will at least consider reviewing any decision by the Service Prosecuting Authority to oppose the appeal and seek a re-trial if Danny's conviction is quashed."
MPs will be able to raise concerns about the case with Solicitor General Oliver Heald after Canterbury MP Julian Brazier secured a debate in the House of Commons.
SAS veterans have been outraged by the case, and four special forces veterans, including the former commanding officer of the SAS, have written an open letter to Prime Minister David Cameron, claiming Sgt Nightingale was "the victim of a monstrous miscarriage of justice".
Sgt Nightingale pleaded guilty to illegally possessing a 9mm Glock pistol which had been packed up and returned to him by colleagues after he had to leave Iraq in a hurry to help organise the funeral of two friends killed in action.
He also admitted possessing ammunition.
Sgt Nightingale's father Humphrey has told Sky News his son was bullied into pleading guilty at the court martial.
Humphrey Nightingale said: "We knew Danny was not guilty but the judge made it quite clear that if he did not plead guilty he would be sent to a civilian jail for a minimum of five years.
"Our hands were tied and we had no other option - Danny has a lovely wife and a young family. We expected a lenient sentence - maybe suspended - but instead he was sentenced to 18 months."