In a statement read by Minority leader in the National Assembly Opiyo Wandayi, the coalition however said it will continue with its rallies across the country in the coming days.
"The cancellation has been occasioned by upcoming engagements that will keep the party's top leaders away in the run-up to Jamhuri Day and a few days after," read their statement.
According to the coalition, the engagements had not been confirmed when they reached the decision to declare their intentions to hold the meeting.
The developments come barely 24 hours after the coalition rallied thousands of their supporters in a show of might at Kamukunji grounds to demonstrate their intent to keep president William Ruto's administration in check.
During the meeting, the coalition's leader Raila Odinga maintained that they will proceed with the plans and urged his supporters to turn up in numbers at the Jamhuri day meeting.
The move appears to have rattled the government who responded by promising to offer scholarships to the attendees of the official function at Nyayo Stadium in Nairobi that will be hosted by President William Ruto.
On Monday, Raila announced he will hold a parallel celebration to mark this year's Jamhuri day.
The move was part of the ODM leader's efforts to build momentum for drawing support for his latest attempts to form a formidable opposition to challenge the new administration.
"On the 12th of December, we are going to Jacaranda Gardens in Embakasi, not Kamukunji. We will be celebrating Jamhuri Day with Kenyan patriots and it is also going to be a very peaceful congregation. No protests, no picketing, although that is also guaranteed by the constitution of Kenya," said Raila.
A number of legislators were yesterday scratching their heads to find out what could have informed the turn of events. A number of leaders within the coalition told The Standard there was concern the meeting they held at Kamukunji had heightened political temperatures.
An ODM insider claimed that donors had reached out to the leaders to seek clarification on the nature of the fete.
"There are concerns holding two parallel fetes would have sent a wrong signal to international partners. We have to strike a delicate balance because we do not also want to portray Kenya as a failed state," said the ODM MP.
A senior official in government also pointed to some 'external powers' keen on doing business with Kenya having reached out to the Azimio leadership to call off the meeting.
Members of parliament from both the ruling party and opposition who spoke to the Standard yesterday after the cancellation of the meeting and requested not to be named said plans by the government to establish the official Opposition Leader's office might have led to a change of tact.
Stay informed. Subscribe to our newsletter
Official statement
"Despite the official statement by the Minority leader, there are so many things going on behind the scenes, you must have heard talk about the office of the opposition leader. That is the game changer," said an ODM MP from Nyanza region.
Yesterday Jubilee Party Secretary General Jeremiah Kioni said the decision was consultative.
"It was consultative, where it was agreed that we allow the government space so that we are not seen to be outdoing them on such an important day," he said.
Kioni said while the Opposition's joy was in engaging with the people this will have to come at an appropriate time.
"We want to see the government fulfil promises. Already as a result of the Kamukunji rally, there have been some fears because of a few whistles and vuvuzelas. Some people have been wondering what will happen if the rallies are sustained across the country," he said.
Nandi Senator Samson Cherargey welcomed the gesture to cancel the meeting.
"For the first time, I can say that the Azimio La Umoja Leaders have been wise on this move. Kenyans would not have liked to see a situation where celebrations to remember the country's independence were made a mockery of by the opposition leaders," said Cherargey.
Wandayi, when he read the statement cancelling the meeting, said the thousands that turned up at Kamukunji grounds on Wednesday made a clear statement that they believed the country was headed in the wrong direction.