Nigeria's federal government has accused the northern Kano State's government of seeking foreign funding to train an Islamic militia.
Many Muslim states in the north have imposed Sharia law
Information Minister Frank Nweke said the state was trying to turn Hisbah, a volunteer group that enforces Islamic law, into a parallel police force.
His comments come 24 hours after police announced a ban on Hisbah and detained its leader and deputy.
Kano governor Ibrahim Shekarau has described the moves as unacceptable.
Kano is one of 12 mainly Muslim states in Nigeria that reintroduced parts of Islamic Sharia law in 2000.
Hisbah enforces rules such as a ban on alcohol sales and the segregation of men and women on public transport.
"The Kano State Hisbah Board has, with brazen disregard for the overriding imperatives of national security, sought the assistance of foreign governments for the training of '100 jihadists' in the areas of 'intelligence' and 'practice of jihad'," Mr Nweke said in a statement.
But reaction from Kano has been defiant.
"It is a blunder for anybody to interpret Hisbah as an independent terrorist group... We will pursue all constitutional means to assert our right on this issue," Mr Shekarau said in a radio broadcast, AFP news agency reports.
Hisbah groups operate in several Nigerian Sharia states, but are more visible in Kano and Zamfara where they receive state government support.
The BBC's Ado Saleh in Kano city says Hisbah has refused to comment on the issue, being in "a state of mourning" after its leader Yahaya Chedi, his deputy and other Hisbah members were detained for questioning on Wednesday.
Earlier in the week, Hisbah ceased its patrols that were aimed at looking for motorbike taxis carrying women, our correspondent adds.
Hisbah volunteers in Kano have seized 2,000 motorcycles since the patrols began in December.
According to Sharia law, men and women are not allowed to travel together on public transport, but women can travel with their male relations.