Accoording to Video Business, talks in Japan aimed at unifying the two leading high-definition formats broke down early Monday without reaching a solution, according to sources who tracked the discussions closely from the U.S.

Although new talks could still be scheduled, sources in both the Blu-ray Disc and HD DVD camps said they now see little choice but to proceed on the assumption that a compromise will not be worked out.

The sources said principle HD DVD developer Toshiba formally broke off the talks in response to the Blu-ray camp's refusal to budge on critical technical points.

At issue between the camps is the location of the data layer within the disc, a feature that determines the overall disc structure and dictates important aspects of the manufacturing process.

Blu-ray Discs place the data layer only 0.1 mm from the surface, which allows the laser to be focused into a tight spot of light, allowing more data to be encoded on the surface.

HD DVD places the data layer 0.6 mm below the surfaced, just as with conventional DVDs. That allows the discs to be manufactured on existing equipment.

Toshiba's top negotiator, Yoshihide Fujii, told the Japanese newspaper Nihon Keizai, "Unifying the formats based on 0.1 mm would be extremely difficult at this stage.