The M5S cancelled a meeting with its longstanding centre-left enemy, insisting Giuseppe Conte would be reinstated as prime minister.
The parties have been trying to create a new viable coalition following the collapse of the country’s populist government, despite having been bitter enemies until just a few weeks ago.
Italian President Sergio Mattarella had on Monday allowed an extra day for negotiations, interpreted by some as a sign that a deal may be underway.
But on Monday, the M5S issued a statement accusing the PD of refusing to cooperate on Conte and said talks were at a standstill until the centre-left changed its attitude.
“Yesterday, after four hours of talks, nothing was achieved,” it said.
“We cannot work like this anymore. Either the attitude changes or it’s difficult [to see a deal being forged].”
The M5S said it would “see the PD again when the party has given its OK to the reappointment of Conte”.
The two parties have until Wednesday evening to come up with a convincing alliance that could take the government through until 2023.