"It seems to me that everything has come to a standstill," Guido Crosetto was quoted as saying by newspaper La Repubblica.
He said it was partly due to the fact that discussions moved from technical aspects to "statements" by and about Elon Musk.
Starlink is a dominant force in the sector with 6,700 active low-orbit satellites. Sources have told Reuters Rome was considering a five-year deal worth a total of 1.5 billion euros ($1.62 billion) with the company that is part of Musk's SpaceX group.