In a scathing attack on their Premier League rivals, Meulensteen claims Manchester City's title bid has wavered because Roberto Mancini's side lack team spirit.
Balotelli's future remains in doubt following the controversial striker's red card against Arsenal at the weekend, and Meulensteen has made it clear the Italian would never play at Old Trafford.
"City do not have a well-balanced team. They only have individuals who play for themselves," Meulensteen told Voetbal International. "You can see that City lack the right team spirit.
"There is no chance of Balotelli playing for Manchester United. A player who gets up to the antics he does has no place at our club. I don't believe that Sir Alex would sign a player like Balotelli. We shouldn't get in people like him - they only bring frustration."
United saw their lead slip to five points on Wednesday after a surprise defeat at Wigan, but Meulensteen is confident United will go on to win a 20th league title.
"United are accustomed to the pressure involved in going for the title," he said. "City are in a position to win the league for the first time in a long while but that is breaking them up. I thought they wouldn't hold out to the end."
Meanwhile, Roberto Mancini has warned controversial striker Balotelli that he must change his ways if he is going to fulfil his pledge to remain with City after accepting his apology for his seding off.
"We are happy but it doesn't change the situation,'' said Mancini. "If he wants to stay he should change his attitude. I spoke with Mario a lot of times about this.
"I don't think he can stay here for ten years together with me. This is impossible. But if tomorrow, or in two or three years, he changes managers or squads, it is important he changes his behaviour.
"He has a lot of quality but he can lose it with his attitude.''