Organisers wanted Bowie to end the show with 'Heroes', but both he and Bush were too reluctant to make such a high-profile public appearance, The Guardian reports.
The Rolling Stones and the Sex Pistols also allegedly declined the opportunity to take part in the 'Symphony for British Music'.
The Who, who closed the show, apparently turned down the request to play twice, only changing their minds when they decided it would be an effective promotional opportunity for their US tour.
A peak of 26.2m viewers in the UK and an average of 26.9m in the US watched the likes of One Direction, Jessie J, Take That and the Spice Girls perform on Sunday night (August 12).
Bowie hasn't toured since 2006 and regularly turns down requests to perform in public. He instead appeared at the Closing Ceremony as part of a video montage as models including Kate Moss and Naomi Campbell celebrated British fashion.
A remix of Bush's 'Running Up That Hill' was also used.
Kate Bush, Elbow, the Spice Girls and Emeli Sandé have all experienced a surge in sales following the Closing Ceremony.
Photo gallery - London 2012 closing ceremony:
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