Bolivian politics took an especially turbulent turn last month when four of the country's nine provinces declared autonomy to protest against the president's reforms and the draft of a new constitution approved by his allies.
Prior to Morales' edict, both sides had been negotiating on how to incorporate some of the provinces' autonomy demands into the new constitution and divvy up lucrative revenue from gas exports.
'Constant lies'
The opposition said chances of a compromise were slim even if talks resumed next week.
Branko Marinkovic, a leader of the opposition movement in Santa Cruz province, told local media: "I think the Bolivian people are tired of this double-speak and the constant lies we are living in this country.
"The government says it wants dialogue but it does exactly the opposite ... and cuts revenue."
The government has said it will try to compensate the provinces for lost natural gas revenue.
"We are looking at alternatives and we are optimistic we will reach an agreement," Luis Alberto Arce, the finance minister, said on Thursday.
Illegal draft
In a sign of growing opposition to Morales, senior Bolivian judges and lawyers said this week that his proposed new constitution was illegal because his allies approved it late last year without input from the opposition or a two-thirds majority in the constitutional assembly.
Legal problems and inconsistencies also riddle the document so it cannot be put to a referendum this year as Morales has planned, the judges said.
Morales says the draft constitution will help redress centuries of domination by a European-descended elite.
Resistance
But Bolivia's first indigenous leader has run into resistance from governors of the eastern provinces, which are rich in natural gas deposits.
On Wednesday, anti-Morales groups in Chuquisaca filed petitions with authorities containing thousands of signatures as part of their drive to become the fifth province to declare autonomy - a move that would tip the balance against Morales.
The government has said Morales and the governors will face up-or-down referendums for their jobs if they fail to reach a national accord soon to end the deadlock.