Officials said they had not cancelled the fests but rather decided not to invest in them.
The original cost was 20 million Brazilian reais ($8.3 million), later reduced to 11 million, and the events could still be held if private investors can be found.
"We learnt through the national press that the private sector will be paying for the event in other cities like Rio de Janeiro and Sao Paulo and we want equal treatment," said Recife's World Cup secretary George Braga.
The reluctance to use public money to host the fest comes eight months after hundreds of thousands of people took to the streets to protest against massive spending on the World Cup and insufficient investment in public services such as transport, health and education.
Tens of thousands are expected to gather for fan fests in the other host cities. Usually held in well-known central plazas or tourist spots, they feature big screens and pre-match entertainment.
The fests started in South Korea in 2002 and were included as part of the official World Cup programme in Germany four years later.
They are a good way for those without tickets to get together and watch the games in a party atmosphere.
"The FIFA Fan Fest symbolises the most exciting part of football and the FIFA World Cup: thousands of fans gathered to watch a match together and celebrate," said former Brazil striker Ronaldo, member of the Local Organising Committee Management Board, in 2012.
Recife, in the hot north of the country, is due to stage five games in the tournament including one in the round of 16. Former world champions Italy and Germany are among the teams that will play there.
The World Cup starts in June.