The previous writers' deal expired one month ago

Both parties are unable to agree over residuals, the bonus payments writers earn from sales of their material on DVD and to cable TV networks.

Members of the Writers Guild of America want a greater share of profits from DVD sales - income the studios rely on to offset the cost of film-making.

However, both sides played down the possibility of a strike.

"As it currently stands, their so-called final offer for a three-year contract is unacceptable," Daniel Petrie Jr, president of the WGA's West Coast branch, said in a statement.

"Fair agreement"

But he added the guild "intends to continue these talks as long as it takes to reach a fair agreement. We urge the companies to make the same commitment."

The latest offer includes a basic salary raise for TV writers, higher contributions to the guild's health plan and modest gains in residuals for pay-cable TV shows and made-for-video sequels.

"We have gone as far as we can go," a spokeswoman for the Alliance of Motion Picture and Television Producers said.

Industry insiders believe production could suffer if the current stalemate continues beyond the 4 July holiday weekend.