The deal seeks to put an end to a conflict that goes back decades
Muslim separatists in the Philippines have rejected a power-sharing proposal put forward by the government.
The Moro Islamic Liberation Front (Milf) said the plan was "unacceptable" and would not give the southern region of Mindanao enough autonomy.
The move means a peace deal is now unlikely before the end of President Gloria Arroyo's term in office in June.
The Milf has been fighting off and on for decades for autonomy from the Philippine government.
At least 100,000 people have been killed in the conflict and a further two million forced into refugee camps.
Milf negotiator Iqbal Mohagher told the AFP news agency there was "nothing in their draft comprehensive compact agreement that is worth considering at this stage".
"What we want is a real state and sub-state relationship where we can have real governance and control over our lives," he said.
"We don't want to be a mere token administrative arm for the region."
Government negotiators said they were still hopeful a deal could be reached but giving the rebels what they wanted would require a change in law.
"We're a government. We cannot propose anything outside the constitution," said Rafael Seguis.
Earlier peace talks collapsed in 2008, when a promised agreement was quashed by a Philippines court as being unconstitutional.
Manila's chief negotiator, Annabelle Abaya, told AFP talks would resume in March and the two parties could still "narrow the gaps".
More than 1,000 people were killed and nearly 750,000 people were displaced by fighting between security forces and rogue Muslim rebels between August 2008 and July 2009.
Although often described in religious terms, pitching Muslims against a Catholic-dominant majority, analysts note the conflict has been focused on ownership of resource-rich land.
Efforts have been under way for 12 years to end the conflict.