YESTERDAY'S breakdown in union management negotiations destroyed hopes among the workforce that there had been a fundamental change in the way Dunnes Stores to be run.

"The issue here is not a commercial one", said one Mandate source. "It's pride, family pride."

The belief among the union negotiators is that brother and sister, Margaret Heffernan and Frank simply do not want to giverole, or power, to any third: such as the Labour Court or Labour Relations Commission.

Recent developments at the top of Dunnes Stores had led union negotiators to believe there were grounds for optimism.

Dunnes headhunted Dick Reeves from Quinnsworth and Andrew Street from the British multiple Boots, and appointed both men to the board. For the first time in its 52-year history, Dunnes had only two family members on the board, and they were now balanced by two outside professionals on the four member board.

When the talks began last Tuesday the management team was led by Mr Street, the first time in years a director of Dunnes had negotiated directly with the unions.

Union negotiators found him to be a man who was at ease with industrial relations and who was doing his best to make a deal. "He seemed a man who wanted to get on with the show," said Mandate general secretary Owen Nulty.

By around 4 a.m. on Sunday, following 16 hours of talks, the unions negotiators felt they had "the best part of a deal. We shook hands on two documents and believed that the two signed documents would emanate from Dunnes Stores later in the morning", said Mandate national official John Douglas.

Mr Street, the principal company negotiator, disagrees strongly with this version of events, according to a company spokesman. "There was agreement on a number of issues, but by no means could it be said a deal had been done."

One of the documents covered pay, jobs and conditions, and the second was concerned with procedures for referring disputes to third parties such as the Labour Court. The issues had remained unresolved since the three week strike last year, which had a negative effect on Dunnes' market share and ended when the deputy chairman of the Labour Court, Mr Finbarr Flood, issued a peace formula.

This peace formula was accepted by both sides but has not yet been implemented by the company.

Yesterday morning hopes that the implementation of this year old peace formula was at last about to be agreed turned sour. Union and management met at around 11.30 a.m. in a Dublin hotel and began amine the wording of the draft documents.

About 30 minutes later, management was called from the meeting. Mr Street went to join his fellow directors in the Dunnes Stores' head office on Stephen Street. The union team waited in their hotel.

The company says that what happened was that advisers pointed to difficulties with the procedures for referring disputes to third parties. The union says that when they contacted the company, at 1.40 p.m., they were told the board was not prepared to agree to either of the two documents.

"The rug was pulled" from under the feet of Mr Street, Mr Nulty said. "Now there is a credibility problem". He emphasises that he believes Mr Street at all times acted in good faith, but there is a huge difficulty in dealing with Dunnes.

"Trust is the major issue now. We understood a deal was almost there, and then we're told this morning that they want to renegotiate. It's a ludicrous situation."

THE company has a different version of events. It had a problem with elements of the procedures document and wanted these clarified. Because "nothing was agreed until everything was agreed", the company, therefore, had not agreed on anything. However, in essence, everything else really was agreed.

The company spokesman emphasised that Dunnes had accepted the principle of third party involvement.

A letter outlining the company's view was sent to Cavendish Row in time for the shop stewards' meeting, but was rejected and "seen as a further breach of trust," said Mr Douglas.

Last night the company was seeking talks and asking that the strike be called off, but the unions were saying "the die is cast".

They'll talk, but the strike will go ahead. As third party involvement is at the centre of the dispute, it is unlikely that such a party will, in the short term, be called in. Mr Street's credibility, in regard to his ability to deliver, has been damaged in the unions' eyes.