A 14-party Bangladesh opposition alliance led by the Awami League has announced that it will boycott the elections to be held on January 22.
Sheikh Hasina, the leader of the Awami League, said the alliance would stay away since the interim government has failed to create the right atmosphere.
"We have agreed not to participate in the election because the country's interim government in charge of holding a free and fair election has failed to create a congenial election atmosphere," Hasina told a news conference on Wednesday.
"The caretaker government is not neutral."
Hasina's announcement adds to uncertainty in the run-up to the parliamentary elections.
The opposition accuses the interim administration of favouring a rival alliance led by Begum Khaleda Zia, who handed over power in October.
Besides seeking the dismissal of Iajuddin Ahmed, the president who heads the interim administration, and several election commissioners, the oppostion has been demanding that fraudulent voters be weeded out of the electoral list before polls are held.
Hasina insisted that Ahmed must resign as interim head of the country because he had failed to prove his neutrality and had acted under instructions of Zia.
"Besides the election boycott, we will now launch a bigger movement to oust Iajuddin from the post of caretaker chief," she told a news conference.
At least 45 people have been killed and hundreds injured in political violence since an interim government took over at the end of October to steer the country to the polls.
The opposition had earlier demanded a postponement of the elections.