The fledgling group were told "they had no future in showbusiness" as guitar groups were "on the way out" following the audition.
The decision by a Decca Records executive proved to be one of the worst made in music history.
Within months John, Paul, George and original drummer Pete Best had signed with EMI and went on to become the greatest band of all time.
Now the original safety master tape, a 10-track demo the group recorded at Decca's London studios on New Year's Day 1962, has come to public light for the first time.
It is thought the Beatles' manager Brian Epstein held on to the tape he had paid to make and later gave it to an executive associated with EMI.