Kevin Pietersen’s hopes of playing Test cricket for England again have been handed another major blow after Surrey decided not to re-sign the controversial batsman.

The county de-registered Pietersen just days before the release of his controversial autobiography last October. Now the Guardian understands Surrey have completely ruled out bringing him back.

Speaking last October, Pietersen said: “I am in contact with Surrey because I love Surrey and Graham Ford, my mentor, is the coach there.”

Surrey’s recent recruitment of the Sri Lanka great Kumar Sangakkara for next summer indicated there would be no way back for Pietersen. And his high market value combined with the recent reduction in the salary cap for counties from £2.19m to £1.97m has killed off any prospect of a return.

It brings to an end Pietersen’s four-year association with Surrey and, unless another county offers him a deal, raises the very real prospect that he will have no future involvement in English cricket.

Without a county deal, it is unlikely Pietersen would play any red ball cricket, making a Test return all but impossible.

Pietersen was sacked by England last February in the aftermath of the team’s humiliating Ashes whitewash in Australia.

But his return to the Australia in the past few weeks to play for Melbourne Stars in the Big Bash League has been an unbridled triumph. Improved form, including three half-centuries,, and a well-executed charm offensive has seen Pietersen win over team-mates and a previously sceptical Australian public.

His involvement in the T20 competition came to an end at the semi-final stage on Sunday when the Stars lost by 18 runs at Perth Scorchers, leaving the 34-year-old’s immediate future in limbo. Although he has another year to run on his Big Bash deal, Pietersen’s playing commitments elsewhere appear thin on the ground.

As well as Surrey, Delhi Daredevils, the Indian Premier League franchise who paid him £880,000 last year to captain the side, released him in December.

Somerset, coached by Pietersen’s good friend Matthew Maynard, are one English county who could offer him a home. Yet the reduced salary cap, which put off a far wealthier county in Surrey, and Pietersen’s reluctance to base himself away from his west London home for any prolonged period would make that move appear a long-shot.

Instead, he is more likely to continue attempting to play as a T20 gun for hire. Pietersen has the option of putting himself forward in this year’s IPL auction and if he were not to commit to an English county, could play a full season in the Caribbean Premier League following his brief spell with the St Lucia Zouks last year.

Speaking before Sunday’s Big Bash semi-final, Pietersen did not endear himself to any potential county employer when he advocated the adoption of a franchise system for English cricket and when criticising the salary cap, branded some of those on the domestic circuit “muppets”.

“They can learn because the franchise system does work,” he said. “Everybody has made it work. I think playing once a week doesn’t work in the UK, especially if you want to get good players in the teams. I tried it last year and found it very hard playing once a week.

“What’s frustrating is they say they want to help homegrown players. But the best way to make them become better is to play against better players. Find a way to franchise county cricket. You would have 10 counties or franchises who play each other in Twenty20 or one-day cricket.

“All the muppets who are on £18 grand, £15 grand, either you become better or you go and do something else. The best players would play against each other week in week out. That’s how you become better. You don’t do that by reducing salary caps.”