Obama accused Republicans of demanding ransom over Obamacare
President Barack Obama has called off his trip to Malaysia to tackle the US government shutdown, the office of Malaysia's PM Najib Razak has said.
Secretary of State John Kerry will represent him next week instead, the office said.
The US government has partially shut down after the two houses of Congress failed to agree a new budget.
More than 700,000 federal employees face unpaid leave, and national parks, museums and many buildings are closed.
Mr Obama earlier vowed not to allow Republicans to undermine his signature healthcare legislation as a condition to restart the US government.
"They demanded ransom," Mr Obama said.
Four-nation trip
Mr Najib's office said Mr Obama had called the prime minister on Wednesday to inform him that Mr Kerry would address an entrepreneurship conference in Kuala Lumpur on 11 October in his place.
Mr Obama's visit would have been the first by a US president to Malaysia since Lyndon B Johnson in 1966.
Mr Obama had been scheduled to begin a four-nation Asian trip on Saturday to boost economic ties.
It would also have taken in Indonesia, Brunei and the Philippines.
There has been no confirmation yet of what Mr Obama intends to do with the rest of the itinerary.
Mr Obama has been forced to call off trips to Asia before.
In 2010, a vote on health care and the Gulf of Mexico oil spill forced separate cancellations in March and June, though he did make it to India, South Korea, Japan and Indonesia in November of that year.
'A lot of anxiety'
The US government ceased operations deemed non-essential at midnight on Tuesday, when the previous budget expired.
National parks and Washington's Smithsonian museums are closed, pension and veterans' benefit cheques will be delayed, and visa and passport applications will go unprocessed.
However, members of the military will be paid.
One group of elderly military veterans managed to bypass the shutdown when the WWII Memorial in Washington DC - that they had travelled from Mississippi to see - was opened for them.
Treasury department employee Peter Gamba told the BBC he was worried by the turn of events.
"For whatever reason I cannot fathom, you're asking me to again give up my pay and give up service to the American public," he said.
"It's a nightmare for me financially, it causes me a lot of anxiety and stress and I don't sleep well at night."
President Obama has blamed conservative Republicans in the House of Representatives for the government shutdown, saying "one faction of one party" was responsible because "they didn't like one law".
"They've shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans," Mr Obama said.
The White House rejected a Republican plan to fund only a few portions of the government - national parks, veterans' programmes and the budget of the District of Columbia.
The Republicans have called for more negotiations.
A spokesman for House Speaker John Boehner called the White House's position "unsustainably hypocritical".
Rory Cooper, a spokesman for Republican House Majority Leader Eric Cantor, accused Mr Obama of "hyper-partisan speeches".
An opinion poll released on Tuesday suggested the American public was inclined to fault the Republican strategy.
An estimated 72% of voters oppose Congress shutting down the federal government in order to block the health law, according a poll by Quinnipiac University.
The healthcare law passed in 2010, was subsequently validated by the US Supreme Court, and was a major issue in the 2012 presidential election.
The next key deadline in the US is 17 October, when the government reaches the limit at which it can borrow money to pay its bills, the so-called debt ceiling.
House Republicans have demanded a series of policy concessions - including on the health law and on financial and environmental regulations - in exchange for raising the debt ceiling.
President Obama is due to meet the heads of some of Wall Street's biggest banks - including JPMorgan Chase, Goldman Sachs and Bank of America - to discuss the debt ceiling and other economic issues.
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