Jeremy Hunt could impose a new contract on junior doctors after union leaders failed to back the Government's "best and final" offer.
The Government's chief negotiator, Sir David Dalton, had warned talks were at "the end of the road" should the British Medical Association (BMA) not endorse his latest offer by Wednesday afternoon.
Instead the BMA again called on the Health Secretary to accept its own proposed pay model and withdraw his threat to force through changes, even though the Government has refused to "remove that from the table".
Thousands of junior doctors will return to work from 8am after staging a second 24-hour strike across England as the deadlock over pay and working conditions showed no sign of a breakthrough.
The major sticking point in the dispute is over weekend pay and whether Saturday should be largely classed as a normal working day.
Sir David, who was drafted in by the Government to broker a deal, said in a letter to union leaders Dr Mark Porter and Dr Johann Malawana on the eve of the strike that the Government's proposal - including a concession on Saturday pay - was the "best and final" offer.
He added if they did not accept, he believed there would be "no realistic prospect" of a deal.
"In that circumstance I will advise the Secretary of State that we would have reached the end of the road in relation to the likelihood of reaching a negotiated agreement," he said.
In response, Dr Malawana said in a letter to Mr Hunt on Wednesday that the BMA "deeply regret" the dispute and urged him to accept their suggestion to reallocate some of the proposed 11% rise in basic pay for unsocial hours payments.
The chairman of the BMA junior doctors committee said: "This would give you the cost neutrality you seek and junior doctors the appropriate recognition for evenings, nights and weekends.
"If you are able to accept this model and withdraw the threat of imposition, we believe that our dispute with the Government would be concluded, leading the way to detailed discussion about implementation."
Currently, 7pm to 7am Monday to Friday and the whole of Saturday and Sunday attracts a premium rate of pay for junior doctors.
An offer from the Government in November said doctors would receive time-and-a-half for any hours worked Monday to Sunday between 10pm and 7am, and time-and-a-third for any hours worked between 7pm and 10pm on Saturdays and 7am and 10pm on Sundays.
In a further offer, ministers said that as part of an overall agreement, a premium rate of pay could kick in from 5pm on Saturdays rather than 7pm, and at 9pm Monday to Friday.
Asked whether the Government was ready to impose a contract on junior doctors, a senior Downing Street source said: "As we've said all the way along, we are not going to remove that from the table, because that would effectively be a veto to the BMA on the whole process.
"We have certainly gone the extra mile on trying to get a deal on this and it's very disappointing that there's a further strike today and several thousand patients have been affected by that."
Wednesday's action caused widespread disruption, with analysis by NHS England showing 1,150 planned inpatient procedures were cancelled alongside 1,734 day procedures. Thousands more appointments are likely to have been affected.
NHS England confirmed 43% of junior doctors - out of a possible 26,000 working on a typical day - reported for duty on the day shift. The figure included doctors who had never intended to strike, such as those working in emergency care.