This sounds like a strange situation, in which something isn't adding up. It seems to me that one of two things is going on here:
- This isn't actually the reputable journal that you think it is. It might be a "look-alike" predatory journal, or a formerly-good journal that has been hijacked, but in either case they are trying to scam you.
- Something is deeply confused within the editors, and they've decided to publish despite the fact you've told them that you will not be paying.
In the first case, you definitely don't want your paper there, and in the second case maybe you'll get a free publication for some strange reason. The problem is to distinguish between the two cases.
Accordingly, I would recommend proceeding by writing an email something like the following:
As you know know from our former correspondence, we are unexpectedly unable to pay the publication fee for this paper. We are confused as to your current plans for the paper, however, and request a clarification. Which of these two is your current plan for the paper?
- The paper is withdrawn, and we will submit to a different venue.
- You plan to waive the fee and publish the paper free of charge.
Please let us know promptly, so we can plan the next step with this paper. If you do not reply within one week, we will assume the paper is withdrawn.
If they are predatory, they'll probably try to either stall or else try to tell you they're going to publish it and you have to pay. Ignore such threats, even if they bluster about taking you to court. You are the author and nobody can force you to publish a scientific paper against your will: if they try, they will simply be exposing their own fraud.
If they're real, they'll probably answer one way or another --- or fail to, in which case you would be quite reasonable to assume the paper is de facto withdrawn and take it elsewhere.