Mugabe and Zimbabwean opposition leader Morgan Tsvangirai agreed on September 15 to form a power-sharing government, but the deal has become deadlocked as the parties fight over control of key ministries.
"Power-sharing isn’t dead but Mugabe has become an absolute impossible obstacle to achieving it," Mark Malloch Brown told BBC radio. "He is so distrusted by all sides."
Referring to a call on Sunday by U.S. Assistant Secretary of State Jendayi Frazer for Mugabe to step down to clear a path for the deal to go ahead, Malloch Brown added: "The Americans are absolutely right — he is going to have to step aside."
The deadlock between Mugabe and Tsvangirai has held up any chance of ending the spiralling crisis in the southern African country, where a spreading cholera epidemic has killed more than 1,100 people and food and fuel are in short supply.
Malloch Brown described the situation in Zimbabwe as being in the "final death throes" and said such scenarios often seemed "terribly slow and grim and unnecessary".
He said he doubted Mugabe would go willingly, and added that offering him immunity from prosecution could be difficult.
"In this era of the International Criminal Court, it is very hard for any particular country to offer that guarantee."
Mugabe’s government has accused former colonial power Britain and the United States of trying to exploit the cholera epidemic to end Mugabe’s 28-year rule — a suggestion dismissed by both London and Washington.