The move came days after the Tehrik-e-Taliban Pakistan warned the provincial government that it would scrap the peace agreement, bitterly opposed by the US, if all of its provisions are not implemented by June 23.
"We will not attend any meeting with the government until our prisoners are released as agreed in the May 21 deal," Taliban leader Ali Bakht told the Daily Times.
The Swat Peace Committee and the NWFP government had invited the Taliban for a jirga in Peshawar today to iron out differences on the peace agreement signed on May 21.
The Taliban set June 23 as the deadline for implementing all clauses of the agreement, including the release of prisoners and withdrawal of troops from the restive Swat valley.
Taliban spokesmen have claimed that all prisoners should have been freed 15 days after the signing of the deal.
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Meanwhile, the federal government has authorised the NWFP government to enter into deals with the Taliban for ensuring peace in the province, Rehman Malik, the Advisor to the Prime Minister on Interior Affairs, has said.
Malik had sparked a major controversy earlier this month by telling journalists that the federal government intended to scrap the peace deal in Swat as the Taliban had not stopped their attacks on security forces.
Despite the signing of the peace deal, violence has continued in Swat. Yesterday, Jamaat-e-Islami leader Zamir Khan was shot dead by militants at Kabal in Swat.