Carlisle believes the world governing body should shoulder a large part of the blame for the demoralising state of affairs, which has seen Zimbabwe suspended from playing Tests for the second time in two years.
"This is very embarrassing for cricket in Zimbabwe," Carlisle told the BBC.
"I put 95 percent of the blame on the ICC. They could have done a lot more and avoided this. But they just didn't want to get involved.
"One day the ICC is going to have to stand up and make a decision on something.
"They can't always pass it on and say it's an 'internal matter'. They're going to have to grow a spine and make a decision."
On Wednesday, the interim committee of Zimbabwe Cricket (ZC) announced they would not play any more Tests in 2006 although they were still committed to honouring their one-day commitments.
The decision was taken after a series of woeful international performances as well as a player strike as members of the national squad became increasingly frustrated with the way the game was being run in the country.
They also claim that they are still owed monies from the board.
Carlisle believes the whole situation could have been avoided with action a year and a half ago.
In April 2004, ICC chief executive Malcolm Speed travelled to Zimbabwe to talk to the country's cricket chiefs about a boycott by the country's top white players.
Speed was forced to return home after the Zimbabwean officials refused to meet him.
"Instead of sending Speed, they should have sent a committee," Carlisle said.
"They should have sent a three-man research team and spoken to players and administrators. They always get one side of the story. They could have sorted this out a long time ago."
Carlisle also insists that the country's top players will quit once they receive the money they are owed.
"The majority of the players will be walking away once they are paid - they've just had enough," he added.
"I can't foresee Zimbabwe regaining Test status until they pay the players and sort out the product."