"President Mwai Kibaki requested Raila Odinga to submit his proposals for appointments into the cabinet. The president is yet to receive the list," Alfred Mutua, the government spokesman, said in a statement.
"The consultations for the formation of cabinet have gone on for over a month and have to end at one point."
Kibaki held talks at his office with Odinga on Sunday.
Yvonne Ndege, Al Jazeera's correspondent in Kenya's capital Nairobi, said the sticking point was the key ministerial positions of finance, local government, energy and internal security.
She said that Kenya was on a "knife edge" and that there was a huge amount of public anger over the size of the cabinet which could be one of the "biggest in the world".
According to the government statement, Kibaki's Party of National Unity (PNU) is to cover the finance, defence, foreign affairs and justice portfolios, while the ODM is to take others including roads, public works and tourism and agriculture.
The delay is a major setback in the implementation of a deal reached on February 28 to end the violence that erupted following December's election, which Odinga accused Kibaki of rigging.
The violence killed at least 1,500 people and displaced hundreds of thousands.Cabinet questioned
The size of the new coalition cabinet has been criticised by the media, with newspapers saying 40 ministers is a waste of money in a country where many live in poverty.
|"Questions will continue being raised about the need and cost of such a large grouping"|
"This will be the largest cabinet Kenya has ever had since independence. Questions will continue being raised about the need and cost of such a large grouping," Kenya's top-selling Nation
newspaper said in an editorial on Friday.
Church and civil groups have threatened mass action if Kibaki and Odinga fail to reduce the new cabinet to 24 members.
The government conceded that the cabinet was large, but said it was necessary to include all communities across the country.
"Most of the new ministries are subdivided from formerly existing ministries and therefore the budget and members of staff for those new ministries already exist," Mutua said.
"There is no price that is too high for our country to ensure peace, harmony and reconciliation, healing and stability that will spur and grow the economy and create even more wealth." 'Totally wasteful'
The head of the Africa Centre for Open Governance accused Kenya's political leaders of creating a "totally wasteful government".
"What Kibaki and Raila [Odinga] did was to show that their clients are not the people of Kenya, but themselves and their political expedients," Gladwell Otieno said.
"The two agreed to set up a totally wasteful government, rewarding each other with ministries that we do not need and yet they are the ones who set off the crisis that has left Kenyans suffering."
"This is a very bad start for a Grand Coalition that has yet to be accepted by a majority of Kenyan," Mwalimu Mati, an anti-corruption campaigner with Mars Group Kenya, wrote on his blog.
He estimated the cost of the new cabinet as costing Kenyans 52 billion Kenyan shillings ($840m) a year.
About 60 per cent of Kenya's population lives on less than one dollar a day.