Union leaders tonight accused the catering firm at the centre of the Heathrow airport dispute of walking out of peace talks and claimed that negotiations had now "collapsed".
The dramatic development threw a huge question mark over attempts to resolve the bitter row over the sacking of 670 mainly Asian women workers by the catering firm Gate Gourmet.
The company spent 18 hours in talks with the Transport and General Workers Union over the past two days and seemed to be edging towards a deal.
British Airways announced it had agreed the terms of a new contract with Gate Gourmet to supply food for its flights at Heathrow until the 2010 but added it was conditional on the industrial dispute being resolved.
Gate Gourmet chairman David Siegel said he was "cautiously optimistic" of reaching an agreement although he insisted that he would not reinstate all the workers, one of the key demands of the union.
Brendan Gold, chief negotiator for the TGWU, said that as far as he was concerned the company had walked out of the talks.
"I am despondent and disgusted at the way things have been concluded and I feel very frustrated at the lack of progress."
Mr Gold said the two sides had been moving towards a process to take the negotiations forward but that was "suddenly reversed" late in the day.
"Everything we were working towards has collapsed," said Mr Gold outside the London headquarters of the TUC where the negotiations were held.
Mr Gold said the main issue remained the reinstatement of all the workers adding: "The company seems to have a view that we have 200 militant troublemakers but if you look at the picket line you will know that this is not true.
"I am disgusted and quite angry at the apparent cynical way the company has behaved.
"When I am sitting down talking to the chairman and I see the rest of his team walking out I can draw only one conclusion."
Mr Gold said he found the actions of the company "truly amazing".
Brendan Barber, general secretary of the TUC who had helped bring the two sides together, said he was "disappointed" at tonight's outcome.
"There is considerable uncertainty now. Earlier in the day we seemed to be making good progress towards a possible procedure that might have led to a resolution of the dispute.
"Late in the day the company said it wanted more time which was a blow to the whole process."
Mr Siegel told Mr Barber that he will be in touch with him in the next couple of days but the TUC leader added: "Progress had faltered very late in the day. Everyone will be reflecting on what this means."
