Jimmy Airlie, chief union negotiator, met senior managers in a secret session in London on Friday after 240 sacked workers unanimously rejected a peace formula involving a 27 per cent reduction in pay and benefits.
Leaders of the Amalgamated Engineering and Electrical Union will today consider stepping up the dispute.
While management agreed to a further meeting little progress was registered at the brief encounter on Friday which involved Peter Hall, Timex UK president, and executives from the company's US headquarters.
Union representatives are convinced the plant is in danger of closing. They believe the 290 newly-recruited workers have been unable to achieve the desired quality on computer circuit boards.
Union sources yesterday held out little immediate prospect of resolving the dispute. Timex started production in Dundee nearly 50 years ago, abandoned the production of watches there in the early Eighties and now the whole future of the plant has been cast into doubt. An engineering union official said the closure of the plant would be a 'Pyrrhic victory'.
Fred Olsen, the Norwegian- born owner of Timex, said last week that the plant lost pounds 1m last year and had been in deficit for a decade. He had been 'very foolish' to keep it open.
A spokesman for the company said the factory now expected to make a profit and rejected fears over the quality of production.