While the Maoists want the government to free 29 prisoners in exchange for the release of the ruling Biju Janata Dal (BJD) MLA, the government has said it will release only 25.
There is also confusion over who will apply for bail for the release of the prisoners - the deadline given by the rebels for the government to take action ends Wednesday evening.
The government says the prisoners will have to file bail petitions in their nearby courts through their lawyers, which the rebels refused.
Hikaka was kidnapped by the Andhra-Odisha border special zonal committee of the Communist Party of India-Maoist in his home district of Koraput March 24.
The Maoists have sought the release of 29 prisoners, mostly members of the Chasi Mulia Adivasi Sangh (CMAS), which works mainly in the southern parts of the state, including Malkangiri and Koraput districts, on tribal-related issues.
According to CMAS leader Nachika Linga, the government must withdraw cases against the prisoners on its own as they were innocent and booked on false charges.
CMAS lawyer Nihar Patnaik said the Maoists had told him not to file bail petitions.
"They want the government to move the courts under section 321 of criminal procedure code," he said.