The government refused a formal request to replace the current inquest by Coroner Robert Owen, who said he was concerned he couldn't fully investigate all aspects of the case, The Daily Telegraph reported.
Last month Owen formally asked the government to replace his proceedings with a public inquiry because of concerns over secret evidence.
Litvinenko, who fled to Britain in 2000, was poisoned with radioactive polonium-210 while drinking tea at a central London hotel in 2006. Andrei Lugovoi, a former KGB bodyguard, and Dmitri Kovtun were identified as prime suspects. Both deny any involvement.
Foreign Secretary William Hague was successful in keeping some sensitive material secret -- meaning it could not be considered by the inquest -- including evidence on whether the Russian government was involved in Litvinenko's death.
Litvinenko's family said they believe he was working for British intelligence and was ordered killed by the Kremlin.
Litvinenko's widow, Marina Litvinenko, threatened to withdraw from the proceedings if the government did not make a quick decision about an inquiry. She has accused the British government of displaying "utter contempt" for her and her son when a decision on whether to conduct a public inquiry into his death, originally expected July 3, was delayed.