Pietersen was left out because he failed to confirm he did not send derogatory text messages about team-mates.
London: Controversial batsman Kevin Pietersen said he was "gutted" after being dropped on Sunday from the England squad for the third and final Test against South Africa amid speculation of dressing room tensions with his team-mates.
Pietersen was left out because he failed to confirm he did not send derogatory text messages about team-mates to the opposition, the England and Wales Cricket Board (ECB) said.
The future of Pietersen, who hit a stunning century in the drawn second Test at Headingley, had been under a cloud since he raised the possibility of quitting England with comments at the conclusion of the match on Monday.
"To say I am gutted is an understatement," Pietersen said in a statement to Sky Sports on Sunday.
"This entire episode has been demoralising for me and my family. But, this is not the end of my international career."
He had also been at odds with the ECB since quitting limited-overs internationals in May and over suggestions of his desire to play the whole Indian Premier League season with the Delhi Daredevils instead of two home Test matches against New Zealand next May.
"During the past week we have held several discussions with Kevin Pietersen and his advisors," said ECB managing director Hugh Morris in a statement.
"Following a constructive meeting, it was agreed that a number of actions needed to be completed to re-engage Kevin within the England dressing room.
"A fundamental item was to confirm publicly that no derogatory texts had been sent by Kevin to the South African team. This has not been forthcoming despite clear timelines being set to allow the Selectors to pick the squad for the third test match. We provided an additional six hours this morning to provide every opportunity for agreement to be reached but regrettably this has not been possible."
"The success of the England team has been built on a unity of purpose and trust. Whilst we have made every attempt to find a solution to enable Kevin to be selected we have sadly had to conclude that, in the best interest of the team, he will miss the Lord's Test."
National selector Geoff Miller said: "We need a squad fully focused on this Test match to be able to play the sort of cricket we know is necessary if we are to win this week and level the series."
Pietersen's exclusion came despite a video he released on YouTube on Saturday stating his commitment to playing for England in all three forms of the game.
He also said that dressing room morale had been improved following a long chat with a team-mates. That has failed to sway the selectors, however, who have replaced Pietersen with Jonny Bairstow who made his debut against West Indies in May.
"The video I released was my way to bring closure to the issues I had at that time," Pietersen said. "I stand by every word I said in the video."