Kofi Annan has decided to suspend the talks process in Kenya.
By Adam Mynott
BBC News, Nairobi
Mr Annan called on Kenya's leaders to act responsibly
Coming more than a month since he began mediation efforts between the Kenyan government/Party of National Unity (PNU) and the opposition Orange Democratic Movement (ODM), it is a sign of considerable frustration.
The former UN chief said this was not a "desperate measure" but a necessary move after no progress in negotiations in the past 48 hours.
Talks between the two panels, he said, had turned acrimonious and he would now take the outstanding issues to the two principals, President Mwai Kibaki and Raila Odinga.
Until now, the two four-person panels had been negotiating and referring decisions to their leaders, but it has become a process mired in indecision and prevarication.
"Now," Kofi Annan said, "it is time for the leaders to become engaged in the process."
He has decided to talk directly with the president and his opposite number in the hope that it "might lead to a more speedy resolution".
This is not the end of the process but it is a very serious development, which does not augur well.
The negotiations involve four stages: the first two, an end to violence which has caused the deaths of at least 1,000 people and tackling the humanitarian crisis where up to 600,000 people have been forced from their homes by unrest, were agreed quickly, within days of Kofi Annan starting mediation talks.
The ODM's Mudavadi said the government performed a U-turn
Stage Three was always going to be difficult as it involved trying to find a political agreement out of the disputed election, which would enable Kenya to emerge from the worst crisis it has faced since independence more than 40 years ago.
Various options were on the table, including re-tallying the votes cast for president, a re-election, an interim government and a power-sharing agreement.
Kofi Annan ruled out a re-election on the grounds that the situation in the country was far too tense to be able to handle another ballot, certainly in the short term.
With the support of the United States, the European Union and others in the international community, discussions centred on setting up an interim government with power shared between the PNU and the ODM.
At the heart of this was the creation of the post of prime minister, an office which does not exist in the Kenyan constitution.
The fourth stage involves long-term, deep-rooted changes to Kenya's institutions and constitution and this process has not begun. Kofi Annan said it might take a year or more.
The ODM said it was prepared to make concessions and abandon its demand that President Kibaki should resign, but it insisted that if it were to get the post of prime minister, it should be a position that has executive power.
The PNU engaged in talks about creating the position of prime minister, but it has been reluctant to invest executive power and authority in the post. This is where the talks have unravelled.
A senior figure involved in the panel led by Kofi Annan has said that over the past three days of talks, Friday, Monday and Tuesday, the atmosphere became worse and worse.
Positions, the figure added, have suddenly changed, new texts have been introduced and he pointed the finger at the government for displaying a complete reluctance to actively engage with the possibility of yielding power under an interim administration.
Mutula Kilonzo, leading panel member for the government, said the very fact that it was prepared to allow the creation of the new position of prime minister showed its willingness to engage in meaningful negotiations.
But Musalia Mudavadi from the ODM panel said no real concessions were being offered by the government and there were no indications that the government wanted to give the prime minister any meaningful powers.
One day things were apparently agreed by the PNU, he said, and the next there were reversals.
There is no timetable for the meetings Kofi Annan plans to have with Mwai Kibaki and Raila Odinga but he has made it clear that delay is not an option.
"Time is of the essence," he said.
"The people of Kenya, men women and children are pleading for peace and stability."