The decision not to award the requested funding for the event, and for the North West 200, means the Ulster Grand Prix will no longer go ahead.
The North West event, meanwhile, is set to proceed despite the decision.
DUP MP Sammy Wilson said: “Tourism NI must explain why they have pulled the plug on the NW200 and the Ulster Grand Prix – events which by their own admission would have generated tens of thousands of bed nights in Northern Ireland.”
He added: “Since October, my colleagues and I have been working with the economy minister and Tourism NI representatives on a business case to fund both events.
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“The business case was approved by Tourism NI, the Department for the Economy and the Department of Finance.
“It showed that for every £1 spent by government, £12 would be generated.”
Mr Wilson said his party colleague, Economy Minister Gordon Lyons, had also given the event funding proposal the go-ahead.
“The economy minister has given the funding the green light,” he said.
“Yet, in the final weeks of the process, Tourism NI are now raising issues which have scuppered the events. John McGrillen [Tourism NI chief executive] and the management board have serious questions to answer.”
A spokesperson for Tourism NI said: “Tourism NI has received a request from Revival Racing Ltd seeking funding of £800,000 to stage the North West 200 and Ulster Grand Prix in 2022. This is over six times the funding provided by Tourism NI to stage the events in 2019.
“The Department for the Economy and Department of Finance provided Tourism NI with the necessary approvals in principle to pay out the sum of money requested if Tourism NI was in a position to do so.
“The funding request has now been considered by Tourism NI’s board and it concluded that it could not justify the level of funding requested both on financial and legal grounds.
“Tourism NI has provided Revival Racing with an indicative offer as to what it could expect to receive and what we believe would be sufficient to allow both the North West 200 and Ulster Grand Prix to progress this year.
“We are disappointed to hear that Revival Racing has decided not to proceed with the Ulster Grand Prix this year.”
l See Sport