Lawrence had been scheduled to join Pompey on a permanent transfer as part of the deadline day deal which saw Marc Wilson join the Potters with striker David Kitson heading in the opposite direction.
But the Football League today rejected the part of the deal involving the midfielder, claiming that the south coast side failed to submit the necessary paperwork before the 6pm deadline.
Portsmouth deny those claims but will now have to lodge a bid with the Football League to take the player on an emergency loan as the transfer window has now closed.
Lawrence, who is currently on international duty with the Republic of Ireland, has not figured in any of Stoke's fixtures so far this season and is keen to seal the move to ensure that he is playing first-team football.
Stoke now hope to loan the 28-year-old to Portsmouth although the move will have to be ratified by the Football League, who will only authorise the deal if they are satisfied that the Championship side need him.
"We're disappointed that this transfer hasn't gone through," said Stoke chief executive Tony Scholes.
"However, it is important that we work with Portsmouth, the player and the authorities to find an expedient solution as if it had gone through.
"The aim now is to ensure we arrive at the same point for both clubs and, most importantly, for the player who had made up his mind up to join Portsmouth.
"That will probably take the form of a loan move until the end of the year and then Liam would finalise his permanent move to Fratton Park in the January window.
"Clearly, we will co-operate with Portsmouth, the player and the authorities to arrive at a solution all parties desire."
Portsmouth administrator Andrew Andrinikou is confident the matter will be resolved.
He told The News: "The Lawrence deal has not been ratified by the Football League yet and we are still waiting to hear the outcome.
"Unfortunately, we are not Tottenham and are not allowed to have this issue sorted the next day as they did with Rafael Van Der Vaart.
"This sort of thing will only happen to us. There is proper brinkmanship going on just because we are Portsmouth Football Club.
"The whole world knew two weeks before that we wanted this deal to happen. Unfortunately, they have been finding ways of making things difficult to actually push it through.
"From our end, all documentation was sent on time, well before the 6pm deadline. I was there myself to see it.
"Admittedly, the deal happened a little later than we would have liked as the player was training with the Republic of Ireland squad. We haven't even had a chance to give him a medical yet. But it was sorted before 6pm, I can tell you.
"The authorities also reckon the Tommy Smith deal to QPR was completed at 6.02pm or something like that. This puts more work on us but we are determined to see it through, even if we have to get the player on loan instead."
Meanwhile, Andronikou has also revealed that new deals for Kanu and Ricardo Rocha are set to be completed on Tuesday.
He added: "We expect the Rocha and Kanu deals to be approved today.
"I expect them both to be available for selection on Saturday against Ipswich."
Source: Team Talk
Source: Team Talk