UNION leaders involved in the Timex dispute in Dundee said last night

that the company plans to close the plant by Christmas.

Emerging from two hours of talks in a city hotel, senior company

official Mr Mohammed Saleh, announced that talks would continue today,

adding: ''We are always hopeful.''

Local union officials of the AEEU, however, were more pessimistic.

The deputy vice-convener of shop stewards, Mr William Lesslie, said

the company had warned emphatically that even if the last package on

offer was accepted, there was a 90% likelihood of closure by Christmas.

Convener of shop stewards, Mr John Kydd, said various options were put

by the company to the union but, at this stage, were unacceptable.

He claimed that they had been informed that if the last deal offered

was not acceptable, the plant would close, adding that there seemed to

be nothing fresh from Timex.

He said it was hoped that some of the points made by the union would

be considered by Mr Saleh and that he would see some sense and change

his opinion.

Mr Kydd added: ''We were prepared to compromise but we are still poles

apart.''

There had been jubilation earlier on the picket line when it was

confirmed that Mr Peter Hall, president of the Dundee plant -- appointed

two years ago with a salary of #72,000 -- had resigned his post.

It had been thought that a huge obstacle to a settlement had been

removed with his resignation.

Mr Gavin Laird, AEEU general secretary, said the resignation of Mr

Hall had come as a surprise and added: ''I am extremely pessimistic

about the plant's future.'' He suggested that it would require

''something of a miracle'' if closure was to be avoided.

Yesterday's talks followed intense activity at boardroom level after

Mr Hall resigned. He had been the central figure in what began as a

routine dispute over lay-offs and escalated into the dismissal of 340

workers and their replacement by new recruits bussed in daily past

jeering demonstrators.

Details of Mr Hall's resignation were given to present staff and

workers, who number almost 400, by Mr John Dryfe, the American-based

president of the parent company.

Pickets outside the plant cheered the news and celebrated by burning

placards demanding Mr Hall's resignation.

However, Mr Hall, 41, was in a near jaunty mood last night outside his

#300,000 Surrey family home in Godalming, in the heart of London's

stockbroker belt. There was clear relief that a burden had been lifted

from his shoulders.

He said the recent events had been a nightmare for his family. He was

adamant that the final decision to go had been his and his alone --

despite inevitable speculation that followed when his international

bosses became intimately involved in the negotiations last week.

For six months, the Timex workers had been demanding his resignation.

It came on Sunday night and was made public only yesterday.

Asked if he had been made the scapegoat, Mr Hall replied: ''I hope not

but you will have to ask Timex that -- it is their problem now.''

Was there a future for the factory? ''That, too, is a matter for

Timex,'' he declared.

The company confirmed the news in a brief statement, saying it

regretted to announce Mr Hall's resignation from his post as a president

of the corporation and a director.

The strike, which has seen huge rallies and arrests on the picket

line, has entered its twenty-first week.

A ''final offer'' was made to the sacked workers following the arrival

in Dundee of Norwegian Mr Fred Olsen, the Timex chairman, who intervened

personally.

It was rejected amid allegations that it effectively meant a 27% cut

in wages, a two-year pay freeze, and would affect pension entitlement.

The SNP, Labour, and the STUC criticised the Timex stance, and called

for fresh negotiations.