Former rower Redgrave, who won gold medals at five consecutive Games from 1984-2000, was widely tipped as the favourite to do so ahead of Friday night's extravaganza.
Organisers had kept the identity of the final person to carry the torch and light the cauldron secret. That led to speculation that Redgrave or gold medal-winning decathlete Daley Thompson - the favoured choice of LOCOG chairman Lord Coe - would have the honour.
Redgrave carried the torch into the Olympic Stadium - but then handed it over to seven young athletes, chosen by Olympic legends including himself and Thompson, who had the ultimate honour.
And Redgrave has admitted that his competitive ego meant he was disappointed not to have been allowed to finish the job alone.
Writing in the Sunday Telegraph, he said: "Of course looking back I must admit that when I was told it would not be me lighting the flame at the Opening Ceremony, I was a little disappointed.
"It was not a question of arrogance. It was about the expectation of everybody I knew, who kept saying that it had to be me when I knew deep down that it was not going to happen.
"As an extremely competitive individual with an ego, there is a part of me that would love to have lit the flame."
He added that he had been informed of the plan two and a half weeks before the ceremony, which was widely acclaimed as a masterpiece planned and executed by film director Danny Boyle.