It appears now a case of who will blink first – the AFL or Essendon – as talks to agree penalties over the AFL club’s supplements saga stretch deep into a second day.

Discussions between lawyers for Essendon and the four Bombers officials charged, and the AFL continue at Melbourne’s AFL House on Tuesday, with no resolution yet in sight.

Fairfax Media reports the league has set a deadline for later on Tuesday to agree penalties, otherwise the spectre of an AFL Tribunal hearing for those involved, or Supreme Court action against the AFL, could come into play.

Essendon, coach James Hird, club doctor Bruce Reid, assistant coach Mark Thompson and Bombers football manager Danny Corcoran all face charges of bringing the game into disrepute arising from the suspect 2012 supplements program at the club.

All parties have been inside AFL House since Tuesday morning after negotiations on Monday failed to reach a resolution.

Essendon being removed from this season’s finals appears a certain penalty.

Heavy fines, the loss of draft picks and possible suspension for key figures in the scandal including Hird are also among options being canvassed.

The Bombers have been under investigation by ASADA and the AFL since February over the club’s supplements program.

An interim report was presented to the AFL earlier this month, with sanctions set to be based on that while the ASADA investigation remains ongoing.

Hird has filed a separate Supreme Court writ against the AFL that remains alive.

That could be a potential sticking point in any negotiations.