The European Union has called off talks on closer ties with Serbia because of its failure to arrest war crimes suspect Ratko Mladic.
Gen Mladic has been indicted over the 1995 Srebrenica massacre
EU Enlargement Commissioner Olli Rehn said he was disappointed Belgrade had not detained Gen Mladic. The deadline set by the EU expired on Sunday.
Serbian Prime Minister Vojislav Kostunica said Gen Mladic was "alone" in hiding, and urged him to surrender.
His deputy prime minister has resigned over Gen Mladic's continuing liberty.
Miroljub Labus, a key Serbian negotiator in the talks with the EU's executive arm, the European Commission, said his government had "betrayed" the interests of the country and its citizens by not arresting Mr Mladic.
He quit after the EU announced its decision on the talks, which were due to resume on 11 May.
Mr Mladic, a former leader of the Bosnian Serb army, is accused of genocide in relation to the massacre of about 8,000 Muslim men and boys in Srebrenica in 1995.
Along with his civilian counterpart, Radovan Karadzic, he is the most wanted war crimes suspect in Europe.
He is thought to be hiding somewhere in Serbia.
Mr Rehn said he had discussed the situation with the chief prosecutor at the UN war crimes tribunal in The Hague, Carla del Ponte, who said Serbia had let the tribunal down.
"Her assessment is negative," he said. "I must say that it is disappointing that Belgrade has been unable to locate, arrest and transfer Ratko Mladic to The Hague.
"The commission has therefore to call off the negotiations on the stabilisation and association agreement.
"The commission is ready to resume negotiations as soon as Serbia accedes full co-operation."
Ms Del Ponte said: "The obvious conclusion I can draw is that I was misled when I was told at the end of March that the arrest of Mladic was a matter of days or weeks."
Mr Kostunica, who had promised that Mr Mladic would be located, arrested and transferred to the tribunal, said everything had been done to try to bring in the fugitive.
He said Mr Mladic was alone on the run since the government had cracked down on his support network.
"His entire network has been uncovered; Mladic is now hiding all alone," he said.
Serbia was hoping to reach a new deal with the EU by July to take its first step on the road to eventual membership.
All the other countries in the Balkans, except Bosnia, already have such stabilisation and association agreements, providing for closer political and economic ties with the EU.
But Ms del Ponte had called on the EU to take a tough stance on Belgrade.
The BBC's Oana Lungescu says Mr Rehn's use of "calling off" rather than "suspension" of talks is significant, as it means the EU executive can resume talks instantly once Mr Mladic is arrested - rather than go through the lengthy procedure of getting political approval from all 25 EU governments.
She says there are, however, fears of a nationalist backlash at a sensitive time in Serbia's political calendar.
This year, Belgrade stands to lose both the province of Kosovo, where the majority ethnic Albanians demand independence, and its partner Montenegro.
The latter will be holding a referendum in just a few weeks on whether to pursue its union with Serbia.