The Sudanese government says it no longer recognises the existence of a major opposition party, SPLM-North.
Soldiers loyal to SPLM-North have been fighting government troops in Southern Kordofan and Blue Nile states.
The party has strong ties to the rebels who recently won independence for South Sudan after decades of civil war.
In another development, South Sudan says it will relocate its capital from Juba to Ramciel in the centre of the country.
SPLM-North says many of its party members have been arrested and the Sudanese government has now declared it has no legal status.
Yet just over two months ago the government signed an agreement with the opposition party aimed at finding solutions to problems in Southern Kordofan and Blue Nile, in which it formally recognised its existence.
Fighting has since broken out in Blue Nile between Sudanese forces and fighters loyal to SPLM-North.
It follows three months of clashes along similar lines in Southern Kordofan.
SPLM-North says several of its offices have been shut down and party members arrested.
Rabie Abd al Atti, a senior official at the information ministry, confirmed the government did not recognise SPLM-North.
State of emergency
He did not comment on claims of mass arrests but said if any of SPLM-North's supporters wanted to carry out political activities they would be subject to arrest.
The crackdown comes after President Omar al-Bashir declared a state of emergency in Blue Nile and removed Malik Agar, the leader of SPLM-North, from his elected post as state governor.
The government controls the state capital Damazin while most fighters loyal to SPLM-North appear to have withdrawn to their base in the south of the state, Kurmuk.
Sudan accuses newly independent South Sudan of supporting the SPLM-North fighters, a charge the country denies.
Following months of deliberation, South Sudan has announced its capital will be moved to Ramciel in Lakes state and near several other states.
The new capital will come under the jurisdiction of the national government rather than the state.
One report describes the area as "almost a no man's land" with little or no existing infrastructure.
The government accepts it will take several years to build up the new capital, and the transfer will take place in stages.
The decision was taken in part because the Bari ethnic group, which comes from the Juba area, reportedly asked for the capital to be moved.
There are frequent squabbles over land rights in Juba and elsewhere in South Sudan.
The location of the capital is a highly charged issue in a country with numerous ethnic tensions.
The new site is closer to the heartland of the Dinka, South Sudan's biggest group, which could fuel resentment among some South Sudanese.
The council of ministers said the "protracted debate" over where the capital should be had hindered development in South Sudan since 2005, when the region became self-governing.