It is alleged that the US government, which was reportedly funding the newsletter, is now directing resources towards an unofficial promotion of a faction that wants a senior MDC-T official to take over the party.
While the pullout has been sometime in coming, it is understood recent intra-party violence was the final straw.
Last week, MDC-T director-general Mr Toendepi Shonhe was attacked by rowdy youths loyal to Mr Tsvangirai. The youths accused Mr Shonhe of mismanagement and undermining Mr Tsvangirai’s leadership.
Donors then announced they had pulled the plug and would not finance the PM’s newsletter — which was launched last year — "until further notice".
MDC-T and PM’s Office sources yesterday said they did not know when — or if –the news-letter would see the light of day again.
Contacted for comment yesterday, a spokesperson in the PM’s Office said the "moratorium" on publishing the newsletter had nothing to do with other papers.
"The frequency of the newsletter is not of importance to any newspaper, but to our readership.
"The newsletter has been there for the past year and why is it that it has drawn your interest now?"
The US Embassy in Harare had not responded to questions from this paper at the time of writing.
However, one senior MDC-T official said: "Things are not flowing well and donors have stopped extending money for the printing of the newsletter.
"Reports that we are getting show donors were frustrated by the way Shonhe was treated by youths loyal to Mr Tsvangirai."
Another source said donors were not happy with the management of funds released for this and other projects.
"The major thrust for this project was to transform the newsletter into one of the leading newspapers in the country by the time we go to elections but this was not happening," the official said.
The official alleged there were fears some of the money was paying parallel Government staff in the PM’s Office.
The staff in question — whom Public Service Commission chair Dr Mariyawanda Nzuwah has already said are not welcome in Government buildings — are reportedly earning as much as US$7 000 monthly.
Observers said the latest developments were a bad omen for Mr Tsvangirai’s party.
Political analyst Professor Jonathan Moyo yesterday said: "Tsvangirai is now facing formidable challenges from within and the suspension of funding by the donor community reflects the beginning of the crumbling of his empire.
"There are four factions within MDC-T that are fighting for dominance and the (one led by a senior party and Government official) is the most serious threat to Tsvangirai.
"However, at the moment the donor community wants to continue using Tsvangirai as a cover because they feel his brand is stronger than MDC-T itself."
The newsletter, which was being co-ordinated by an official in the PM’s office Mr Andrew Chadwick was launched last year together with MDC-T’s mouthpiece The Changing Times.
Yesterday, MDC-T spokesperson Mr Nelson Chamisa said The Changing Times was funded by resources from the party’s investments, including a regalia shop at their headquarters.