The bitter miners' strike - which split the nation 25 years ago - was nearly resolved twice during the last month before the dispute ended, a new book discloses today.

The dispute, which dragged on for a year, ended up as a battle of strength between Margaret Thatcher and the miners' leader, Arthur Scargill, under the secret Whitehall code name of "endurance". It paved the way for the end of trade union power in Britain and left tens of thousands of defeated miners living in poverty on the dole as wave after wave of pits were closed.

The first failed attempt to solve the dispute involved secret talks between Lord Whitelaw, the Tory deputy leader, and Mick McGahey, the Communist deputy leader of the National Union of Mineworkers - facilitated by Bill Keys, the leader of the printworkers' union.

The negotiations, which began over a bottle of chablis in the House of Lords, are revealed in the hitherto unpublished diaries kept by the late Keys. The initiative collapsed when Scargill ruled out the deal because it would lead to pit closures.

The second involved the near capitulation by Ian MacGregor, the coal board chief, to everything Scargill wanted three weeks before the dispute collapsed.

Norman Willis, the TUC general secretary, had been courting MacGregor for months to see if the TUC could broker talks. MacGregor eventually agreed but lorded it over the unions by holding them at the Ritz and then at his flat in Belgravia.

To get talks going, both sides agreed to scrap the long-standing disputed wording over future pit closures and replace it with a fresh set of proposals. Talks progressed until 12 February 1985, when both sides sat down to agree a new text that amounted to a "get-out-of-jail card for Scargill". It effectively prevented pit closures until both sides agreed the pit reserves were exhausted.

News of the deal reached Peter Walker, the energy secretary, as both sides were sitting down in MacGregor's flat. He despatched the coal minister, David Hunt, with a fresh set of papers.

According to Hunt there was a confrontation with MacGregor in the living room. Hunt told a pale MacGregor: "There is nothing for it but for you to gather up all those papers. Tell them you need to look at them again for a moment." MacGregor - who had also received an angry telephone call from Thatcher - did as he was told, the papers were replaced and the offending phrase was removed.

The book recalls: "The government had been saved at the 59th minute of the 11th hour from a grossly embarrassing situation."

That night, Walker wrote a "secret and personal" letter to MacGregor. The letter, released under the Freedom of Information Act, concluded: "Scargill could immediately announce that the NUM will continue its policy of opposing the closure of pits for economic reasons."

MacGregor's reply - also released under the act - is equally surprising, since it betrays the view of a man ground down by the dispute. He told Walker: "You will realise that, built into the legislation under which the NCB operates, is a degree of consultation on a scale which I doubt is matched in any other industry.

"This already pre-empts much of the management's rights, and moving away from that is a task which will take a considerable time and much patience."

In his autobiography, MacGregor dismissed the exchange as "largely a matter of semantics" and played down the seriousness of the rift. Until now this has been accepted. But papers released by Whitehall and interviews with both Walker and Hunt reveal a different story, which was to prove fatal to the career of the coal chief.

Later that evening Walker and Hunt met and decided to sack MacGregor within a year of the strike coming to an end. Hunt was instructed to woo Sir Robert Haslam, the head of British Steel, to take over from him. Haslam was reluctant but finally agreed. Within a year MacGregor had resigned.

• Marching to the Fault Line: The 1984 Miners Strike and the Death of Industrial Britain, by Francis Beckett and David Hencke. Constable and Robinson £18.99.

A rich seam: Stories from the dispute

The year-long miners' strike started by accident.

Cortonwood, the pit that began the strike on 5 March 1984, should not have been on the closure list. A secret report, released under the Freedom of Information Act, revealed: "The area director was wrong to announce closure ... it has not yet been confirmed by the board."

Flying picket operation was based on old map.

Eric Illsley, now Labour MP for Barnsley Central, recalls NUM officials retrieving a map used as a blueprint for the 1974 strike. Many pits had since closed. Illsley recalls: "I remember calls in the dead of night from some pickets saying: 'We've got here but there's nought but broken windows.'"

David (now Lord) Hunt thought his appointment as coal minister was a prank.

"John Gummer often used to get people to ring you up pretending to be someone else," he says. Hunt cross-questioned the PM, who said irritably: "You take up this job at 6pm." He then realised it was true.