The thinly veiled threat alarmed the ruling Congress party, prompting it to call an emergency meeting of its leaders later on Saturday.
"Don't take the next step in the deal," Communist Party of India-Marxist (CPM) General Secretary Prakash Karat said after meeting Prime Minister Manmohan Singh in the Indian capital.
"The government should not proceed further till all doubts and apprehensions (about the agreement) are evaluated," he told reporters.
The face-off widens the chasm between the ruling Congress coalition and the four leftist groups which prop it up in parliament.
However, the communists stopped short of specifically threatening to withdraw support from the Congress-led coalition government, which would reduce it to a minority administration.
The controversial agreement promises to offer long-denied Western nuclear technology to energy-starved India, where existing atomic facilities account for just three percent of its total power output.
Karat said Singh's Congress party-led government must not "operationalise" the deal, which now needs approval from the 45-nation Nuclear Supply Group and the International Atomic Energy Agency (IAEA) global watchdog.
"The government should not take the next step with regards to negotiating on the safeguards agreement with the IAEA and it is for the Congress leadership to decide on the matter which will have serious consequences for the government and the country," he warned.
Karat said the CPM's policy-making politburo would seek to rally national opinion against the deal, struck when US President George W. Bush visited India in March 2005.
"The politburo has decided to take the issue of the nuclear agreement and the dangers of the strategic alliance with the US to the people through a nationwide mass campaign," he said.
The Communist Party of India, another partner of Congress, warned it would lower the "level of cooperation" with the now-shaky government.
"The level of cooperation will now go down and our support to it will be merit-based from now on," party national secretary Doraiswamy Raja told AFP.
The communists oppose closer ties with the United States and say that the deal threatens India's sovereignty.
The main opposition Hindu nationalist BJP party, sensing a chance to hammer the government, dared the Communists to oppose the deal in a parliamentary vote.
"The Communists should stand up and be counted when that happens in parliament," BJP spokesman V.K. Malhotra told reporters.
Analysts, however, said the crisis would bring the collapse of the government, which came into power after ousting the BJP in national elections three years ago.
"It'll be a radical assessment that the Left would immediately withdraw support," said analyst Pran Chopra of the Centre for Policy research independent think-tank.
"But it is a warning that the Left protest would become very dangerous," when the deal is finalised by government, Chopra said.
Others labelled the warning as political "posturing."
"It would be political suicide by the Communists to pull the plug and so this warning is nothing but posturing," Delhi University political scientist Anand Ojha said.
Separately, a top US official earlier said the pact could not be renegotiated.
"The agreement is done. Neither government wishes it to be renegotiated because it is now complete," US under secretary of State Nicholas Burns told Outlook magazine in a published weekend interview.