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We study a dielectric catastrophe in a new class of materials called nanophotonic quantum wires. They are made from two types of photonic crystals where one is embedded in the other. It is considered that the embedded crystal is made from nonlinear dielectric spheres. The wire is doped with an ensemble of nanoparticles which are interacting with each other via the dipole-dipole interaction. The absorption coefficient of the wire has been investigated in the presence a weak probe laser and a strong pump laser. The probe field measures the absorption spectrum and the pump field changes the refractive index of nonlinear photonic crystals due to the Kerr effect. The density matrix method is used to calculate the absorption coefficient. Numerical simulations have been performed for the dielectric constant and the photon bound states. It is found that the dielectric constant of the system has a singularity when the resonance energy of a nanoparticle lies near the bound photon states of the wire. This is known as the dielectric catastrophe. This phenomenon can be used to make all-optical switching devices. [ABSTRACT FROM AUTHOR]