HONG KONG (TIP): Crunch talks between Hong Kong’s democracy protesters and the government have been called off, just hours after demonstrators vowed to ratchet up their occupation of key parts of the city if their demands were not met.

The collapse of the talks, which were due to take place Friday, plunges the Asian financial hub into fresh crisis with protesters refusing to retreat from their barricades and an equally intransigent government rejecting further negotiations.

Parts of Hong Kong have been paralysed for almost two weeks by demonstrations calling for Beijing to grant full democracy to the former British colony and for city leader Leung Chun-ying to resign.

Although the crowds have shrunk dramatically from their peak of tens of thousands last week, the government’s decision to cancel the talks triggered a swell in numbers once more as pro-democracy campaigners gathered to hear the response from their leaders.

Around 1,000 gathered at the main protest site outside government headquarters in the central Admiralty district late Thursday, a AFP reporter at the scene said.

China announced in August that while Hong Kongers will be able to vote for Leung’s successor in 2017, only two or three vetted candidates will be allowed to stand — an arrangement the protesters dismiss as “fake democracy”.

Hopes of a breakthrough were dashed Thursday evening as Leung’s deputy Carrie Lam announced the government was pulling out of talks with the Hong Kong Federation of Students (HKFS), which has been at the vanguard of the protests.
“The basis for constructive dialogue has been undermined. It’s impossible to have a constructive meeting tomorrow,” Lam said.

Her announcement came merely hours after a coalition of pro-democracy leaders gathered at the main protest site and vowed to ramp up their civil disobedience campaign if the talks broke down.
“Hong Kong people will not retreat,” HKFS president Alex Chow had told reporters. “The Occupy movement must be ongoing.”
Student leaders have urged officials to return to the negotiating table, labelling the government response an
“international joke”.

There was frustration among demonstrators after the government announced it had pulled out of the talks.

“I’m very disappointed,” said Jason Coe, a 30-year-old tutor at Hong Kong University who was offering students at the protest help with their homework.

“Last week the government were basically saying ‘Talk to us or we’ll use violence’. These protesters are willing to talk, they want to negotiate and the government has taken that away from them. I’m very worried about what will happen now.”

Pro-democracy lawmakers threw their weight behind the protests, saying they would disrupt the workings of the Hong Kong government by gridlocking the parliamentary committees they control.

“Hong Kong has entered an era of disobedience and non-cooperation,” pro-democracy lawmaker Alan Leong told the crowds.

The threat was issued as embattled city leader Leung came under pressure to explain why he kept large payments from an Australian company secret, with pro-democracy lawmakers saying they would try to impeach him.
Fairfax Media reported October 8 that Leung received two payments totalling HK$50 million ($6.5 million) from Australian engineering firm UGL during a deal struck in December 2011 —months before he took office, but a week after he announced his candidacy.

At the time UGL was purchasing the insolvent property services firm DTZ, where Leung was a director and chairman of its regional operations.