Facing a stubborn impasse with its dancers over labor issues, the Washington Ballet has canceled all remaining performances of "The Nutcracker," which was to have run through Dec. 24 at the Warner Theatre.

It was a decision made with regret, said Kay Kendall, president of the ballet's board of directors. "We have spent the entire day trying to salvage it," she said last night. "We offered the dancers a contract proposal that we thought was quite fair and very generous. We wanted to make this work . . . and they didn't accept it. They chose to strike."

News of the cancellation came as a shock, said Eleni Kallas, local representative of the American Guild of Musical Artists, which represents the dancers. "I didn't even get a call from the ballet myself," she said. "We have to hear this from another local union, who heard it from Warner Theatre."

Kallas added: "We are ready to go to the table. If they gave a damn, they'd be at the table with us."

The cancellation marred a holiday tradition of more than 40 years, disappointing thousands of ticket holders and putting the rest of the company's season at risk. As with dance companies in many other cities, the Washington Ballet counts on "Nutcracker" revenue to help pay for its other productions. Kendall said ticket sales from the production were expected to bring in 64 percent of the organization's annual earned revenue. The ballet's operating budget for the 2005-06 season is $7.3 million.

Closing the show "will affect our bottom line hugely," she said. "We've offered to refund money to people who have bought tickets, so that's probably around a million dollars that we've projected that we won't get."

Attempts to negotiate an employment contract with the union broke down early this week. One of the most troublesome issues is the degree of authority Artistic Director Septime Webre has over scheduling and conducting rehearsals. Dancers say rehearsals for Webre's version of "The Nutcracker" have been unreasonably grueling and have led to too many injuries, while company officials have said injury rates are comparable with those at other companies.

In general, money is not the source of the dispute as much as control over rehearsals, hiring and dismissals, the size of the company and how students at the ballet's affiliated school may be used in productions.

With progress on an overall contract moving slowly, AGMA presented a draft of an "interim agreement" Monday, asserting that it was necessary to put measures in place immediately to protect the dancers' health and safety. The union's demand that its draft be adopted was rejected by management, which then canceled the Thursday evening performance. AGMA declared that the move was a lockout, and the dancers, joined by numerous other unions, picketed Thursday and last night outside the Warner, where "The Nutcracker" opened Dec. 2.

The ballet management countered Wednesday with its own draft of an interim agreement, which the union refused to sign.

"We were willing to make some changes in our proposal in order to work this out so that the show can go on," Kallas said. "The response was that [Jason Palmquist, Washington Ballet executive director, had] made his position clear to us yesterday. It was take it or leave it," she said.

Kendall agreed with that characterization of management's position: "It was: 'If you don't sign it, you don't have an agreement.' "

Kallas said the dancers are still willing to work with management on reaching a pact. "The dancers continue to be prepared to go to the table at any time to work this out," she said.

The decision to cancel the remaining week of performances was "devastating," Webre said in an interview. "I'm certainly deeply saddened that we can't share this production with all the ticket buyers," he said, adding that he felt bad for the dancers and the nearly 300 children involved in the production. And, he said, "I'm highly concerned about the effect this will have on the season going forward."

The dancers were to begin rehearsals Jan. 3 for their next production, "The Bach/Beatles Project," slated to open a five-day run at the Kennedy Center on Feb. 1. That schedule is now in doubt, Palmquist said.

"The dancers are still on strike," he said, "so we have no assurances that they would even be available for rehearsals. We are currently evaluating the effect of having to cancel 'The Nutcracker' on our ability to make the rest of the season happen."

"It's too soon for us to decide the next step," said Kendall. "We are going to go back to the drawing board and see what we can piece together for the rest of the year. It will probably be a reconfigured season."

The dancers' union laid the blame for the "Nutcracker" debacle at management's doorstep. "The company appears to me to be prepared to close down," Kallas said. "It could have been avoided if they had been serious about negotiations, but they were only serious about stalling negotiations."

She added: "We wanted to have negotiations all last week and they said no, their attorney wasn't available. They have not made this a priority. The dancers saw that this would take forever, and they keep getting injured. At some point you have to say no."

Kallas said the union is asking for some provisions that go beyond what it has put into contracts with other companies because of what it sees as a pattern of management retaliation against the dancers. AGMA filed an unfair labor practice charge against the ballet in the spring, asserting that it had discriminated against two dancers for their union activities. The ballet settled with the two dancers before the complaint was ruled on by a judge, but Kallas says the ballet continues to retaliate against dancers who have spoken up about labor issues.

"Ever since they signed the petition [last December] saying that they wanted AGMA representation, the dancers have been singled out and pressured," Kallas said.

Webre denied he has retaliated against any dancer. "I think it's disingenuous," he said. "It doesn't ring true, and it doesn't seem to reflect in fact what happens in the studio. Our work together has been significantly warm and respectful and professional and close.

"The whole concept of using union activity as any sort of criteria for non-renewal of contracts or any other matter is completely anathema to me," he added. "It's never been a part of my thinking. I look forward to directing a healthful AGMA company."

For the dancers, the disappointment was acute. "I'm kind of speechless," said Elizabeth Gaither. "I just didn't think it would come to this. . . . I feel that what we're asking for is what other working people have, and why don't we deserve the same rights? We're always last on the list."

"It's not about money," agreed dancer Alvaro Palau. "It's the feeling of being appreciated. We don't want money for this contract. We want safety and job security and a safe environment, and that's all we ask for."

Jessica Ruckstuhl, center, and Julia Cobble soar through the forest during a "Nutcracker" rehearsal Dec. 1.