Police in riot gear are massed at the troubled Grocon construction site in Melbourne's CBD this morning after late-night talks between the construction company and Victoria's largest building union failed to break the impasse.
At least 100 police, including the riot squad and mounted police, ''secured'' the Lonsdale Street site after arriving about 3am at picket lines manned by hundreds of Construction Forestry Mining and Energy Union workers since Wednesday last week.
About 500 construction workers who have arrived to resume their protest were met by a large wire fence erected by police around Colonial First State's $250 million Emporium Melbourne project.
However the striking workers have vowed to continue their protest, with hundreds more workers believed to be heading to the area.
''Victoria Police will continue to have a presence at the site to ensure the safety of all parties involved,'' a police spokeswoman said.
Police have closed off Lonsdale Street between Elizabeth and Russell streets, and sections of Swanston Street and Little Bourke Street. However trams are still travelling down Swanston Street.
''Victoria Police suggests that members of the public make alternate arrangements if travelling around the vicinity of the Grocon construction site and apologises for any inconvenience,'' the spokeswoman said.Last night, after more than four hours of negotiations, Grocon chief executive
Daniel Grollo rejected Fair Work Australia president Iain Ross's recommendation of a two-week "cooling-off period".
This would have seen the CFMEU lift its blockade of Grocon's Lonsdale Street site and Mr Grollo suspend legal action against the union for 14 days while talks continued.
As he left last night Mr Grollo said "the concept that the illegal blockade and intimidation is only to be temporarily lifted is unacceptable."
CFMEU state secretary Bill Oliver said the union had accepted the FWA recommendation.
"We are back to square one but that's thanks to Daniel Grollo," Mr Oliver said.
He said the CFMEU was still willing to negotiate but the failed talks meant the picket would continue this morning.
Workplace relations minister Bill Shorten has intervened in the dispute and asked Fair Work Australia president, Iain Ross, to host last night's talks.
The Supreme Court was told this week the picket in Lonsdale Street was costing Grocon up to $370,000 a day.
But unions are digging in and threatening to widen the dispute, particularly if police try to break the picket line again. On Tuesday morning officers used riot gear, horses and capsicum spray to try to end the blockade.
Central to the dispute is the role of shop stewards with the CFMEU accusing Grocon of reneging on a deal on how they would be nominated.
Going into the talks Mr Oliver said the dispute was about union representation.
"We want health and safety... shop stewards on the job that the men are comfortable with. We want the union to be recognised on the site," he said.
"We want union apparel. We want to be recognised that with every other builder in Melbourne we have a good relationship, we get on, we build jobs."
Asked if the union was willing to compromise Mr Oliver said it already had.
Victorian building unions yesterday endorsed statewide action as one of the options in response to the bitter dispute.
Opposition Leader Tony Abbott said in response to the dispute that, if elected, one of his first acts would be to re-instate the Australian Building and Construction Commission.
With Ben Schneiders and Vince Chadwick