Former ruling party, whose leader Mohamed Morsi was removed by military, says talks stall over demand to have him reinstated

Senior officials in the Muslim Brotherhood have said that they are involved in behind-the-scenes negotiations with Egypt's army, despite a crackdown on the group's leadership following president Mohamed Morsi's removal last week.

The admission comes as the Brotherhood announced provocative plans to move their pro-Morsi street protests into spaces such as Tahrir Square, where many anti-Brotherhood protests have been held in recent weeks. It also follows signs that Egypt's interim regime will press on with forging a new government with or without Brotherhood support – after the liberal Mohamed ElBaradei was sworn in on Sunday as the country's new vice-president, and the new prime minister Hazem Beblawy appointed several new ministers to his cabinet.

Brotherhood officials had denied they were negotiating with a military regime that has arrested several key members since Morsi's fall, and issued warrants for hundreds more.

But speaking to the Guardian, Dr Mohamed Ali Bishr – a former minister under Morsi – admitted that he had already met with senior military officials on Thursday evening to discuss what each side was prepared to compromise on. However, Bishr said that further negotiations were unlikely because the Brotherhood had demanded Morsi's reinstatement as a prerequisite for further dialogue – a red line for the military.

"There is room for negotiations with the military council," said Bishr, a member of the Brotherhood's guidance council, the group's governing body. "We are open minded and speak to all. They contacted us and we met but they want to continue on the path of the coup but we reject this. Negotiations must start off on the path of democracy and the constitution."

Bishr's statement contradicts that of fellow guidance councillor Mohamed Beltagy, who had previously denied negotiations were taking place. His admission also came as prosecutors announced investigations against Morsi on charges of spying, inciting violence, and damaging the economy. It also follows claims by Brotherhood spokesman Gehad el-Haddad that 200 Muslim Brotherhood members were scouting Tahrir Square, in preparation for Brotherhood protests in the area.

Bishr admitted that the Brotherhood might agree to Morsi's departure, but only if he was reinstated first, and given the opportunity to leave in a manner of his choosing. He also said that the reinstatement of Egypt's constitution – suspended by army chief general Abdel Fattah el-Sisi – was essential for negotiations. "All legal solutions are available," said Bishr. "For example, we demand that the constitution is reinstated, instead of being suspended – even if Morsi leaves office. But he as president must call for new presidential elections – or a referendum on whether he stays in office or not.

"Our quarrel is not about whether the president remains in office or not. It about turning a process that was constitutional into a coup. We do not agree to the coup."

The army did not immediately respond to requests for comment, but it is highly unlikely to give in to the Brotherhood's demands as they stand.

Gamal Heshmat, an official in the Brotherhood's political wing, said that he also met with army officials on Friday, and that the military had demanded that the Brotherhood clear the streets of their sit-ins before any further negotiations can begin. "But we cannot clear the streets," said Heshmat. "The people are free to protest and express themselves."