The Red Cross says Burma's government has ordered it to close five field offices in the country, severely curtailing its humanitarian work there.
The Red Cross says the move will hit those who most need help
The offices, some of which deal with victims of conflict in Burma's border areas, now face closure, it said.
The Red Cross also says it will remain barred from visiting jails, said to include some 1,000 political prisoners.
Humanitarian work for some of Burma's most vulnerable people was now in jeopardy, the organisation said.
A spokeswoman for the International Committee of the Red Cross (ICRC) said the organisation was puzzled by the Burmese government's actions.
"We do not know why they have done this," Carla Haddad told the BBC.
The Burmese government ordered the closure of the offices late last month, she said, but the organisation had decided to publicise its problems now because "dialogue had ceased".
While the Red Cross had not been entirely ejected from Burma, Ms Haddad said she feared the organisation's presence in the country could soon be confined to an office in the capital.
Meanwhile the US ambassador at the UN, John Bolton, said he would table a resolution on Burma in the Security Council in the next few days.
He said Burmese government policies of repression and human rights violations had contributed to instability in the region, and were a threat to international peace.
The Red Cross said the Burmese government had also confirmed it would not allow any resumption of prison visits, suspended since December 2005.
Locations of five Red Cross offices (excluding Rangoon) facing closure in Burma
Until that date, Ms Haddad said, the organisation had visited some 4,700 detainees "on an individual basis" in Burmese jails.
The UN estimates that there are over 1,000 political prisoners in Burma, among them the leader of the democracy movement, Aung San Suu Kyi, who has been under house arrest for over a decade.
Ms Haddad said few governments in the world had tried to restrict Red Cross prison visits.
Earlier this year, the Red Cross suspended its work in Russian prisons because conditions imposed by Moscow conflicted with its principles.
'Determined to re-engage'
The Burmese government's additional demand that the ICRC close five of its field offices means the organisation's work in Burma will be limited to a few rehabilitation projects for amputees.
The offices' work includes providing sanitation and rehabilitation to thousands of people affected by conflict in Myanmar's border regions.
A statement on the International Committee of the Red Cross (ICRC) website said it "utterly deplores" the Burmese military government's decision.
Pierre Krahenbul, the ICRC's director of operations, said the organisation's work "since 1999 has had a tangible impact on people's living and security conditions".
"The ICRC is seriously worried that those most in need today will bear the brunt of the current standoff," he said.
The organisation said it is "determined to re-engage the government in dialogue" to restore its operations in the country.
Burma's repressive government has faced mounting international criticism of its human rights record and failure to introduce democracy.
Aid workers complain that government suspicions have led to lengthy delays in getting approval to travel outside the capital, and obtain visas for foreign staff.