"The instruction we have is that the conditionalities by the team are unacceptable," Justice minister Patrick Chinamasa was quoted as saying by the state news agency New Ziana.
"The UN avenue for sourcing resources for elections is now closed. It is no longer an open book but a closed chapter."
"The ball is back in our court and what we have to do is to look for local resources to conduct our elections and that we have already started doing."
Zimbabwe approached the UN for help with financing general elections which are due later this year on a date yet to be fixed.
For the UN to consider the request it was invited to undertake an assessment mission to the country.
Overstepping mandate
The team wanted to visit the country on Wednesday last week but Chinamasa blocked the mission, saying the team had overstepped its mandate after indicating they intended to meet civic society groups as part of their assessment.
The team was due to meet officials from Zimbabwe's electoral commission, the registrar-general and political leaders.
"It was clear that the team wanted a broader mandate," Chinamasa said. "We remain alert to any attempts to manipulate, infiltrate and interfere with our internal processes and we are happy we have parted ways with them."
Finance minister Tendai Biti said the country was in need of $132-million for the polls which Mugabe's party wants held as early as June.
He said there was no money in the national coffers for the vote. Apart from seeking foreign funding, the government would also try to raise funds from the domestic front.
Biti said the government had to raise enough money or risk the credibility of the vote. – Sapa-AFP