Somali President Abdullahi Yusuf has approved a trip by MPs to Sudan for peace talks with Islamic courts that control the capital, Mogadishu.
Many ministers have resigned and militia have defected
A spokesman for Prime Minister Ali Mohamed Ghedi, who is opposed to the talks, told the BBC the president was usurping the prime minister's duties.
More than 30 ministers have resigned in protest at Mr Ghedi's stance.
Mr Ghedi's interim government is weak already, controlling little more than the town of Baidoa where it is based.
Mr Ghedi's spokesman, Abdurahman Dinari, told the BBC Somali Service that it was up to the prime minister, not the president, to decide whether to hold talks with the Union of Islamic Courts (UIC), and to nominate members to the delegation.
President Yusuf held a meeting with parliamentary speaker Sharif Hassan Sheikh Aden earlier on Thursday, during which he endorsed the plan by the speaker and other MPs to begin talks with the Islamists.
MPs said they were ready to leave for Khartoum for the talks.
However, the Arab League, which was to chair the proposed talks, is reportedly reluctant to do so if the government delegation is not properly representative.
The UIC, for its part, reaffirmed it will not talk to the government as long as Ethiopian soldiers are on Somalia soil.
Sheikh Sharif Sheikh Ahmed, chairman of the courts' executive council, said the Ethiopian troops were invited into the country by the interim government, and the government should state its objective.
"We shall indicate our position regarding the Khartoum talks in the coming days. At the moment, I don't want to pre-empt any action since consultations continue," he said, quoted by the Somali Dayniile website.
Ethiopian troops were seen near Baidoa two weeks ago, supporting the interim government.
But on Wednesday, Ethiopian Prime Minister Meles Zenawi denied his soldiers were in Somalia.
"I have heard of these reports but I reaffirm categorically that we do not have troops in Somalia," Mr Meles said in a BBC interview.
Ghedi is looking increasingly isolated
Eritrea also rejected reports that it has been sending arms to Islamist militia groups in Somalia.
"Eritrea firmly rejects all groundless accusations peddled against it in the past few months," a statement on the Eritrean government's Shabait website said.
"As underlined before, Eritrea has never seen Somalia as a proxy battlefield to settle scores with Ethiopia."
Prime Minister Ghedi's stance against the talks has left him increasingly isolated over the past week.
Four more ministers resigned on Thursday, bringing the total number of resignations to 37.
Since late last week a succession of ministers has left a government that once had more than 100 members, and Mr Ghedi narrowly survived a parliamentary vote of no confidence on Saturday.
Somalia has been without an effective central government since warlords toppled dictator Mohamed Siad Barre in 1991.
Since then much of the country has been ruled by violence and clan law.
The UIC has been credited with success in bringing stability to Mogadishu for the first time in 15 years.