The executive of the RMT transport union will decide on Monday whether to continue with day-long stoppages every Wednesday, move to two 24-hour strikes a week, or switch to 48-hour action.
Jimmy Knapp, general secretary of the RMT, said at his union's conference in Liverpool that there was no question of signal workers calling an end to disruption and accepting a package which management tabled during nine hours of talks on Tuesday.
As the union went into closed session to discuss the three-part offer, managers and supervisors ensured that about 1,600 trains operated - three times more services ran than during the first strike a fortnight ago.
Railtrack, the state-owned company which runs the industry's infrastructure, predicted that even more trains would run next week if the 4,600 signal staff went ahead with a plan to strike for the fourth successive Wednesday.
Management was preparing to write to all 4,600 signal staff to explain the 'extremely generous' pay offer rejected by the union on Tuesday, and 'so that our employees are left in no doubt what they stand to lose'. Railtrack says that employees would receive the 2.5 per cent on offer throughout the industry plus payments in return for a restructuring package, which would add between 13 and 26 per cent to basic rates.
The union argues that at most it would mean 3.8 per cent on total earnings.
Mr Knapp also wrote to members to explain why negotiators had rejected the offer. He said that Railtrack had refused to compensate signalling staff for 'past and present' productivity. Management had also refused to disclose information vital to negotiators and figures provided had been misleading.
In the letter Mr Knapp told signalling workers that management had been shown to be 'bungling, incompetent and out of touch with your