Thousands of people remain camped outside the military headquarters in Khartoum, nearly four weeks after the armed forces toppled president Omar al-Bashir as demanded by a months-long protest movement.
The two sides are grappling over whether an overall ruling council that would replace the existing army council – made up solely of generals – should have a civilian or military majority.
Last week the Alliance for Freedom and Change protest group handed over its proposals for a civilian structure, including executive and legislative bodies that it eventually wants to rule Sudan after replacing the generals.
The 10-member military council late on Tuesday said it agreed to the overall proposals, but had "many reservations".
The protest leaders said on Wednesday that the military council was delaying the entire transfer of power.
"The military council's response to the proposals of the Alliance for Freedom and Change was disappointing and risked putting the country in jeopardy," protest leader Khalid Omar Yousef told reporters.
Responding to a journalist's question on what steps demonstrators would take after the army expressed reservations, Yousef threatened escalatory measures, saying they would continue with the sit-in and prepare for a civil disobedience campaign across the country.
The alliance also expressed concerns about the military dragging the process out.
"The military council's response... is moving in the direction of extending the negotiations and not in the direction of a transition" of power, it said in a statement.
Kidnap the revolution
On Tuesday the military council said the alliance had remained silent in its proposals on ensuring that Islamic sharia remains the bedrock of Sudanese legislation.
The protest leaders said the generals "raised irrelevant issues including the language and sources of legislation in a tedious repetition of the biddings of the former regime".
"We call on the military council to reach an agreement to transfer power," they said in the statement.
The Alliance for Freedom and Change is made up of several political groups, leaders and activists, many of them of the view of building a new secular Sudan.
Sudanese media and websites have often reported that for the protest leaders the issue of legislation and Islamic law is something that can be discussed later, but they first want a civilian body established in order to govern the country.
The protest movement said the military council is acting in a way that seems to "kidnap the revolution and control its outcome".
"The only choice for our people is comprehensive peaceful resistance until the revolution's demands are achieved."
Thousands of protesters have been encamped outside the sprawling military headquarters in central Khartoum since 6 April.
Initially they gathered there to seek the army's support in ousting Bashir. But now they continue to hold their sit-in against the army council, demanding that it step down and transfer power to a civilian authority.
The military council and protest leaders have differed on several issues and not just the composition of an overall ruling council.
Full civilian authority
The military council wanted a two-year transition period as opposed to four years proposed by protest leaders.
The council was also of the opinion that declarations of emergencies be in the hands of a "sovereign" authority rather than the cabinet as sought by protest leaders.
Protest leaders have often called the military rulers the "remnants of the regime" of Bashir.
The council also revealed on Tuesday that Sudan's former head of the feared National Intelligence and Security Service, Salah Ghosh, had been put under house arrest.
It was Ghosh who oversaw security agents' sweeping crackdown on protesters before the fall of Bashir.
Protest leaders however insist their key demand remains the same – a full transfer of power to civilians.
"The solution and success of the revolution lies on transfer of power to a full civilian authority," protest leader Mohamed Naji al-Assam said on Tuesday.