The 20-year-old is said to have got cold feet, sending show bosses into a spin about how to replace her.
Bobbi with late mother Whitney
“Bobbi was seen as a major draw and it is a massive blow," a source told The Sun.
“They knew there were guaranteed fireworks with her in the house and hoped they’d also get some revelations about Whitney.
“As far as they were concerned it was a done deal. But she did a massive U-turn and sent the bosses into a panic."
According to the paper, the Channel 5 show had already lost Outkast rapper Big Boi from the line-up, and producers are struggling to find replacements, despite offering big money deals.
Rapper Big Boi is also said to have withdrawn from the show
“As it stands, they’ve got loads of money to spend, but they’re struggling to find anyone to give it to," the source added.
“There’s talk they’ve actually been offering guarantees people can walk away and still keep their wage. But even that hasn’t worked.”
The latest names linked to the show include Bad-boy Nineties R’n’B star Mark Morrison and 'Saved By The Bell' actor Dustin Diamond.
Carol McGiffin is also rumoured to be taking part
Meanwhile, bosses also face the challenge of giving the house a 'glamorous makeover' in the 72 hours between the final of the civilian series on Monday and the celebrity launch on Thursday.
An exec producer told the Daily Star: “We won’t be keeping the eco theme.
"The layout will stay the same because we won’t be able to do any structural changes. But it will have a completely different feel to it."
'Celebrity Big Brother' launches on Channel 5 on Thursday at 9pm with a two hour show, with a 90 minute 'Big Twist' airing on Friday.