Russian Athletics Federation (RusAF) President Yevgeny Yurchenko has pledged court action if Russian athletes are unable to compete internationally under neutral status.
It comes after RusAF missed a deadline of July 1 to pay $6.31 million (£5 million/€5.6 million) as part of reinstatement criteria following the nation's doping scandal.
World Athletics had fined RusAF $10 million (£8 million/€9 million) in March, in lieu of expelling the suspended organisation outright.
Half of the fine was due at the start of this month, as well as $1.31 million (£1 million/€1.1 million) in various costs.
In reaction to the missed deadline, World Athletics halted the work of the Doping Review Board which decides which Russians can compete with neutral status.
The Russian Taskforce overseeing reinstatement has also been stood down.
During an interview on Russian television, Yurchenko, elected in February, said withdrawing the neutral status for Russian athletes would be a "monstrous violation of athletes' rights".
"I believe that we must go to court to protect this right," he said, as reported by Russian news agency TASS.
Russian Sports Minister Oleg Matytsin has already urged "common sense" from World Athletics, asking the governing body to ensure the "athletes will not be the victims of this situation".
RusAF is facing expulsion, with World Athletics set to discuss the situation at a Council meeting on July 29 and 30.
The fine came after an investigation concerning high jumper Danil Lysenko.
Seven RusAF officials – including then-President Dmitry Shlyakhtin – were charged by the Athletics Integrity Unit (AIU) with obstructing an anti-doping investigation by forging documents to explain missed tests.
The 23-year-old Lysenko now faces a ban of up to eight years.
RusAF has been suspended by World Athletics since November 2015 following revelations of state-sponsored doping.
The Lysenko affair plunged the organisation into further trouble and contributed to the AIU Board stating in a report earlier this year that the World Athletics Council should consider expelling RusAF.