In the year Scotland holds an independence reference, the group had been hoping to put up a memorial near Glasgow Cathedral to mark a battle with the English in the 13th century.
But the city council has refused to allow them to use a piece of its land at the rear of Provand's Lordship.
The Society Of William Wallace has already commissioned a work to commemorate the Battle of the Bell o' the Brae on a steep slope where High Street and Rottenrow meet.
The battle is believed to have happened in about 1300.
Members, who have already spent about £1,200 on the project, heard of the decision in a letter from Stevie Scott, the city parks and open spaces manager.
It says: "At this stage, I have taken the decision to refuse permission for the use of our land.
"I have taken this decision at this time to allow my service the opportunity to review all monuments and statues across the city's parks and public domain spaces to determine their current condition.
"I expect this exercise to commence post the 2014 Games period and would hope to be in a position to reconsider your request nearer the end of the calendar year.
"Thank you for your interest in this location."