The United Mine Workers yesterday rejected a coal industry proposal for binding arbitration to end the nation's 79-day-old coal strike as the government escalated pressure for a negotiated settlement. UMW President Arnold Miller termed the proposal for binding arbitration "ridiculous."

"If it doesn't work, there are no happy solutions," said Labor Secretary Ray Marshall, warning that a breakup of national coal bargaining - coupled with a back-to-work injunction or government seizure of the mines - may be imminent.

Marshall said "There are [still] grounds for a settlement," but other government sources said an equally strong possibility is declaration of a bargaining impasse leading to a "balkanization" of the entire coal bargaining process.

If this happens - and officials were saying it could come within hours - each of the 130 member companies of the Bituminous Coal Operators Association would be free to negotiate its own contract with its employes.

Under a common bargaining agreement between the BCOA and UMW that dates back to 1950, the industry and the international union negotiate a uniform contract for all 130 companies and 160.000 union miners, which together produce half the nation's caol.

Many labor observers say this would virtually destroy the 87-year-old UMW, one of the nation's pioneering labor unions in the era of the late John L. Lewis, as a national force in the labor movement and in the coal industry.

Others say the union is so crippled by internal divisions, inept leadership and pressure from a hard-nosed industry that it could only rally after a breakup.

A collapse of UMW-BCOA bargaining and a spurt of company-by-company settlements could lead to resumption of some coal production to meet critical shortages that are forcing power cutbacks and job layoffs in many Midwestern and mid-Atlantic states. But it could also bring even more chaotic conditions that exist now to the nation's coal fields, some believe.

Under repeated White House threats to intervene directly to end the strike, the union and industry association resumed bargaining, Tuesday night. In a surprise move, the BCOA called on the UMW shortly before midnight to agree to submit the contract dispute to binding arbitration - an offer the union was bound to refuse.

Miller said yesterday he wonted "no part of binding arbitration," and later in the day the union's 39-member bargaining council also rejected it and voted to stand by its earlier endorsement of a tentative settlement reached with an independent coal company that does not belong to BCOA.

This contract with the Pittsburgh Midway Coal Mining Co. had been rejected by the industry association on Tuesday as a model for an industrywide settlement.

The BCOA said it was willing to resume negotiations but did not believe the P&M settlement went far enough toward meetings its demands, presumably its insistence on strong wildcat curbs and other labor-stabilizing measures.

Administration officials indicated that the UMW bargaining council's 25-to-13 vote would put intense pressure on BCOA to yield in the face of the impasse threat as both sides prepared to meet last night - a confrontation that could lead to further stalemate, a settlement or a collapse in bargaining and a go-ahead for White House interventation.

In briefing reporters before the face-to-face talks, Marshall said the "two viable options" at the moment are congressional action to order government seizure and operation of the mines, or invoking the Taft-Hartley Act to order the striking miners back to work for an 80-day cooling-off period.

A third, previously mentioned option, congressional action mandating binding arbitration, appears to be out, and Marshall said he has temporarily shelved his idea of proposing a government-drafted settlement.

But Marshall agiven up hope for a negotiated solution and will "continue [bargaining] as long as it seems to lead anywhere"

The major differences between the two sides include disciplinary action against wildcat strikers, guarantee of pension an health benefits, royalties to the union for non-UMW coal that is processed through UMW mines, industry-proposed deductibles for previously free health care and other knotty issues that have divided the bargainers since negotiations started 4 1/2 months ago.

These were the points that caused UMW bargaining council rejection of a tentative settlement earlier this month that would have provided an increase of nearly 37 percent in total compensation over three years.

As the bargaining council came to the Labor Department to begin talks yesterday afternoon, about 150 angry miners from Kentucky, Tennessee and Virginia gathered outside a door that had been secured by government police, demanding to talk to their council members.

They said they bitterly opposed any of the proposed settlements. "We been done dirt so long that we figured it was time we came down here and found out what was going on," said Wayne Parton, a Middleboro, Ku., miner.

Meanwhile, in one glimmer of hope for compromise, the industry bargaining team underwent one of its periodic personnel shifts resulting in elevation of Nicholas Comicia, chairman of the Pittston Co. and a former miner, to chairman.

Comicia is regarded as more conciliatory than the two previous principals, J. Bruce Johnston, vice president of U.S. Steel, and Bobby Ray Brown president of Consolidation Coal Co. the ranks of the United Mine Workers.

In West Frankfort, III., a District 12 UMW local union official estimated that more than 5,000 UMW members in the state have signed petitions asking for the recall of union President Arnold Miller.

In Pennsylvania the Cyclops Corp. complained that Gov. Milton J. Shapp was not protecting the rights of operators.

Shapp had written the steel company that, although he would protect the lives and property of parties involved, "strikebreaking is not a proper function of the state police, and I will not allow them to be used in that capacity."

In a telegram to Shapp, Cyclops asked, "Don't carriers of previously mined union coal and the nonunion operators have legal rights, also? Witness the lawless violence in Butler County . . . Where is the equality under the law?"

In Indiana the Indiana & Michigan Electric Co. announced that it would impose mandatory electricity outbacks for its 255,000 customers in northeastern Indiana, "sometime Friday," becoming the third of Indiana's six generating utilities to impose the cutbacks.

Meanwhile, cities in North Alabama yesterday cut off street lights to conserve dwindling supplies of coal.