"Most likely I would not be doing the debate. Let's see how much money Fox is making without me," Trump told reporters in Iowa.
Trump made the remarks at a news conference soon after Fox announced the lineup for its GOP debate tomorrow -- the last one before the crucial Iowa Caucus on February 1. He also accused Fox News of "playing games".
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Later, Trump's campaign manager Corey Lewandowski told reporters, "He will not be participating in the Fox News debate on Thursday" and that "it's not under negotiation".
Trump's campaign manager said that it is pretty "irrevocable" that he will skip the event, which takes place days before the crucial Iowa Caucus.
One of the main reasons that Trump decided against participating in the debate -- which is unheard of in the American presidential election -- was the Fox insistence on having its anchor Megan Kelly as one of the moderator.
"The drama capped an increasingly heated war of words involving Mr Trump, Mrs Kelly and Fox News as the debate neared and as Mr Trump found himself facing the prospect of being questioned by her again before a national audience," The New York Times said.
Instead, the real estate tycoon said he would be holding another event in Iowa which would raise funds for veterans. The Republican presidential front-runner said that he took the decision in this regard after press statements from Fox News.
One such statement had said, "We learned from a secret back channel that the Ayatollah (Khomeini) and (Vladimir) Putin both intend to treat Donald Trump unfairly when they meet with him if he becomes president. A nefarious source tells us that Trump has his own secret plan to replace the Cabinet with his Twitter followers to see if he should even go to those meetings."
Fox News said it would go ahead with the debate as scheduled.
"The Fox News/Google debate is set for this Thursday in Des Moines, Iowa. It would mark the first GOP presidential primary debate that Trump has not attended," it said on its website.
Cruz his main GOP rival criticised Trump for his decision and challenged him for a one-o-one debate.
"If Donald is afraid of Megyn Kelly, I would like to invite him on your show to participate in a one-on-one debate between me and Donald, mano y mano," Cruz said.
"And the fact that Donald is now afraid to appear on the debate stage, that he doesn't want his record questioned, I think that reflects a lack of respect for the men and women of Iowa, that he's unwilling to go to Des Moines and be questioned," he said.
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