All five ministers from Hizbullah and ally Amal quit the Lebanese government on Saturday, the head of the group's parliamentary bloc said, but the prime minister said they must stay.
"We have resigned because the majority insists on exercising power on its own," Mohammed Raad said, referring to the anti-Syrian majority that has balked at forming a unity government without first having guarantees that pro-Syrian President Emile Lahoud will step down.
"We don't want ministers who blindly follow the majority," Raad said. "This is about giving a warning to the majority."
But Prime Minister Fuad Siniora immediately issued a statement saying he would not accept the resignations, which he said he heard about from Lebanese media.
"Mr Siniora rejects the resignation of Hizbullah and Amal ministers, even if they officially hand in their resignation, and insists that they take part in government," the statement said.
"This government respects the constitution and principles based on dialogue and consensus, and it insists on co-operating with all parties in order to find solutions which preserve the interests of Lebanon," it added.
The resignations came after the failure on Saturday of a week of talks on forming a unity government and months of political stalemate because of disputes between pro- and anti-Syrian elements in parliament.
The powerful Hizbullah movement, supported by Syria and Iran and flush from its claimed "divine victory" in the summer war with Israel, had two portfolios in the 24-minister cabinet which is dominated by anti-Syrian politicians.
Two ministers from ally Amal also resigned, along with Foreign Minister Fawzi Sallukh who is considered close to Hizbullah.
Hizbullah wants to bring in opposition allies, represented by Christian ally Michel Aoun's parliamentary group -- with 21 of parliament's 128 deputies.
It also wants a number of cabinet posts that would ensure it had a "blocking minority", a move opposed by the anti-Syrian majority that sees this as a Syrian attempt to return strongly to Lebanese politics.
Such a mechanism would allow the opposition to prevent the government from ratifying the formation of an international court to try those eventually charged for the 2005 assassination of former premier Rafiq Hariri.
An ongoing United Nations probe has implicated senior officials from Syria, which for decades was the power-broker in its smaller neighbour, and Lebanese accomplices. Damascus strongly denies any connection with the Hariri killing.
Lebanon on Friday received the final draft of a UN resolution on creating this court, which must be approved by the government before being sent to the UN Security Council for adoption.
Hariri, whose son Saad heads the anti-Syrian bloc, was killed in a Beirut bombing last year that sparked protests leading to the departure of Syrian troops from Lebanon after almost three decades.
Hizbullah leader Hassan Nasrullah said in an interview in October that his movement would call demonstrators onto the streets if necessary.
"If dialogue does not result in a government of national unity, we will resort to demonstrations. It is our constitutional right, our democratic right to express out opinions in the street," he said.
The anti-Syrian majority says the country needs a tight government to carry out the post-war reconstruction and reform programme with the help of the international community.
But Hizbullah believes that only a national unity government can lead to stability and prevent Washington from interfering in Lebanon's affairs.
Earlier this month, the White House sounded the alarm over what it called "mounting evidence" that Hizbullah was "preparing plans to topple" the Beirut government in collaboration with its Iranian and Syrian allies.
Syria has denied trying to overthrow Beirut's pro-Western government and insists Lebanon can only be governed through "national unity". Tehran also termed the accusations baseless.