Leaders from both sides of the divided Mediterranean island have been meeting almost daily for the last fortnight to try to clinch a deal before Cyprus joins the European Union on 1 May, but there has been scant sign of progress so far.
"If we can't include our sine qua nons in the agreement, the Turkish Cypriots will be destroyed. Then I will quit and tell our people not to accept such an agreement," Denktash told a conference at the Ankara Chamber of Commerce on Thursday.
Denktash said he believed work on the peace blueprint could not be completed by 1 May.
"I am surprised at those chasing a fantasy. The work that needs to be done cannot be completed by 1 May," he said.
If there is no breakthrough, UN Secretary-General Kofi Annan has a mandate to fill in any remaining gaps and put the UN plan to parallel referendums on both sides of the island on 21 April.
"Then I will quit and tell our people not to accept such an agreement"
Turkish Cypriot leader
Meanwhile, Britain's implicit warning on Cyprus's status in the European Union if peace negotiations fail triggered a furious backlash on Thursday from Greek Cypriots who said it encouraged on Turkish "intransigence".
Foreign Secretary Jack Straw said on Wednesday during a visit to Turkey that a "no" vote by the Greek Cypriot south and a "yes" vote by the Turkish Cypriots in the referendum could harm the Greek Cypriots' cause.
Even without an agreement, the Greek Cypriots will enter the EU on 1 May and will be considered as the legal representative of the whole island, but Straw implied that politically at least they could not claim to speak for the Turkish Cypriot north.
Tassos Papadopoulos, the Greek Cypriot leader who is internationally recognised as president of the island, insisted Cyprus's status on entry into the EU was clear.
"There is a decision of the European Union on the status of Cyprus after accession and I think that says it all," he said.
His spokesman, Kypros Chrysostomides, went a step further. "Statements of this kind just encourage intransigence from the side of Denktash," he said.
Cyprus has been divided along ethnic lines since Turkey invaded in 1974 in response to a Greek Cypriot coup backed by the military junta in Athens.