Opposition protests have resumed in the Armenian capital after talks broke down between the ruling Republican party and the opposition, forcing the prime minister, Serzh Sargsyan, to resign on Monday.

Thousands of people descended on Republic Square in the capital, Yerevan, on Wednesday after a call from the opposition leader, Nikol Pashinyan, to return to the streets until the government agreed to a transition of power.

Drivers beeped their horns in support of the demonstrations and opponents of the government shouted demands for an election.

Protesters on Wednesday fanned out across the city, draping Armenian flags over their cars and blocking off Yerevan’s central avenues. 

Shock as Armenia's prime minister steps down after 11 days of protests.

The resumption of protests, which have crippled downtown Yerevan and have brought the government to the brink of collapse, could transform this Caucasus nation of about three million people. The opposition claims the ruling party has led the country into stagnation.

Allies of Pashinyan said on Wednesday that they were ready to go “to the end”. Ararat Mirzoyan, a member of parliament for the opposition Civil Contract party, said: “Two days ago we left the people with the understanding that we’re going all the way to the end, especially until the end of the Republican party.”

Civil Contract’s offices were a buzz of activity on Wednesday, as protest leaders discussed the possibility that the Republican party could collapse. On Wednesday afternoon the nationalist Armenian Revolutionary Federation said it would withdraw from a governing coalition with the Republican party.

Asked whether he thought Karen Karapetyan, the acting prime minister, could step down in the coming days, Mirzoyan said “it’s going to happen soon”.

Pashinyan played a key role in ousting Sargsyan, organising many of the protests and calling for the prime minister to go in a televised exchange, before being imprisoned and then released. He had been due to start talks with the ruling party on Wednesday, but they were cancelled late on Tuesday.

Sargsyan was a close ally of  Vladimir Putin and Russia is closely watching events in the former Soviet republic, where it has two military bases. On Tuesday, the Kremlin said it was pleased the situation appeared stable for now.

The Kremlin is watching with concern as its small but strategic ally, where Russia has a military base, is wracked by nearly two weeks of enormous demonstrations that prompted its former president-turned-prime minister, Serzh Sargsyan, to resign on Monday.

Karapetian is an ally of Sargsyan, who served as president for 10 years, then became prime minister as Armenia transitioned to a new form of government. It reduced the president’s powers and gave more authority to the prime minister.