Argentina today accused the US judge who called its new debt restructuring plan illegal of making "imperialist" comments against the country.
Latin America's third biggest economy tipped into its second default in 12 years in July after US District Judge Thomas Griesa blocked payments to holders of debt issued under US law that was restructured following its record default in 2002.
Griesa ruled that measures announced by Argentina's president this week to make debt payments locally and push bondholders to bring their debt under Argentine law violated past court rulings.
But he stopped short of holding the country in contempt.
Argentine Cabinet Chief Jorge Capitanich said US District Judge Thomas Griesa's choice of words were "unfortunate, incorrect and even, I would say, imperialist expressions".
The government has accused the judge of abusing Argentina's national sovereignty and of siding with the US investment funds who rejected large writedowns in the wake of 2002 and are suing the country for full payment on their bonds.
In a strongly worded statement, Argentina's economy ministry said Griesa's remarks showed a "complete ignorance of the functioning of democratic institutions."
Lawyers for Aurelius Capital Management, one of the so-called holdout investors suing Argentina, said there could be no hope of deal until was made clear to the Buenos Aires government that its efforts to skirt the court's rulings would be punished.
A resolution to the long-running saga now looks unlikely before a change of government after next year's October election ,analysts say. President Cristina Fernandez can not run for another term.
The country's peso currency shed 5.2% in the two sessions after tough-talking Fernandez unveiled the draft billlate on Tuesday, its fastest fall since January, hitting a new record low of 14 per dollar on the black market.