Crunch talks between Hong Kong democracy protesters and the government were called off yesterday just hours after demonstrators vowed to ratchet up their occupation of key parts of the city if their demands were not met.

The collapse of the talks, which were due to take place today, 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-yingto resign.

Under plans unveiled by China in August, Hong Kongers will be able to vote for Leung's successor in 2017, but only two to three vetted candidates will be allowed to stand.

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 yesterday 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.

"The basis for constructive dialogue has been undermined. It's impossible to have a constructive meeting tomorrow," she said.

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.

Pro-democracy lawmakers also threw their weight behind the protests yesterday saying they would use their powers to disrupt the workings of the Hong Kong government inside the city's parliament by gridlocking the committees they currently control.