The collapse of the talks, which were due to take place tomorrow, plunges the vital financial hub into fresh crisis with protesters refusing to retreat from their barricades and an equally intransigent government rejecting further negotiations.
Parts of the southern Chinese city have been paralysed for more than a week by demonstrations calling for Beijing to grant the former British colony full democracy and for the city's Chief Executive Leung Chun-ying to resign.
Although protester numbers have dwindled in recent days, small groups still control multiple intersections across the city in what has become the most concerted challenge to Beijing's rule since Hong Kong's handover in 1997.
Hopes of a breakthrough were dashed Thursday evening as Leung's deputy, Chief Secretary Carrie Lam, announced the government was pulling out of talks with the Hong Kong Federation of Students (HKFS), one of the leading protest groups.
Two and a half hours earlier a coalition of pro-democracy leaders had gathered at the main protest site and vowed to increase their civil disobedience campaign if the talks broke down.
"Hong Kong people will not retreat. And there's no reason for anyone to ask us to retreat. Therefore the Occupy movement must be ongoing," HKFS president Alex Chow told the crowd.
"Also the students will go into different Occupy areas," to discuss potential future plans for further civil disobedience, he added.
"Hong Kong has entered an era of disobedience and non-cooperation," pro-democracy leader Alan Leong told crowds.
The threat was issued as the city's embattled leader Leung came under pressure to explain why he kept large payments from an Australian company secret with pro-democracy lawmakers saying they would try to impeach him.
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