Barton, who is about to enter the final year of his current deal, refused to sign a new contract in January, claiming the club's refusal to countenance more than a two-year agreement, with an option for a further 12 months, was unacceptable.
The 28-year-old midfielder had been hoping to hold further discussions this week, but his agent, Willie McKay, claims he was informed by managing director, Derek Llambias, on Wednesday that no new offer would be forthcoming.
As a result, McKay has claimed Barton will leave St James' at the end of next season unless there is a change of ownership at the club.
That stance leaves Newcastle in an awkward position, as Barton, who commanded a £5.8m transfer fee when he left Manchester City in 2007, will be free to leave for nothing next summer.
However, Pardew insists the Magpies will not be held over a barrel, and claims he will be perfectly happy to select Barton next season even if the ongoing impasse between the two parties is not resolved.
I spoke to Joey on the last day (of the season) and I think we were both resigned to the fact that this contract was going to be a problem, said the Newcastle boss. But both of us are thinking that next year we'll be together and we'll go on from there.
I've been open and up front with Joey all along. I knew this was all going to be an issue at some point, but we decided the best way was probably to wait for the season to end.
But you'd have to say that Joey pulled all the way through (this season) and I know he'll pull again next year, even if he's in his last 12 months. I know he will.
Unless something changes over the summer, and there's a bid in that the board, myself and Joey feel works for Joey, I'm confident he will be here for the start of the season. And the thing about contracts is, times change.
Circumstances do, of course, change with time, but the characters involved are unlikely to alter and, if McKay is to be believed, there has been a complete breakdown in trust between Barton, Llambias and owner Mike Ashley.
Pardew is involved in contractual discussions, but ultimately it is Llambias and Ashley that have the final say in financial matters and the pair appear willing to adopt an intransigent stance.
I'm not upset about the situation, said Pardew. I was more upset at the time when we thought we'd agreed (in January) and there was a change of heart. I was upset at that point because I knew it would be a problem to come back from that.
There was a lot of history between Joey and the board here before I arrived. I knew that, on top of it, might make it difficult. I just wanted to be honest with Joey and match him with clarity. That's what I've done.
While Barton's future has dominated the headlines in the last 48 hours, Newcastle officials have also been busily pursuing a couple of deals that would represent an explosive start to their summer transfer dealings.
There have been two separate approaches to French club Lorient in an attempt to sign striker Kevin Gameiro, with the most recent having involved the tabling of a £10m bid.
However, 24-year-old Gameiro continues to covet a move to Spain's La Liga, and it appears unlikely that a deal will be concluded swiftly.
That might not be the case with Lille winger Gervinho, who has been on Newcastle's radar for a number of months now.
The Ivory Coast international, who can play on either flank or through the middle, has also been interesting Arsenal and Manchester City.
However, Newcastle are hoping to steal a march on their rivals by using some of the £35m received from the sale of Andy Carroll to fund a hefty up-front payment.
We've given a player a deadline this week, so that'll be interesting, said Pardew, who has also resurrected his interest in Charles N'Zogbia after failing to land the former Newcastle winger on January's transfer-deadline day. We think that's 60-40 in our favour.
We are pitching for a striker that we bid for - that's been reported. We're hopeful on that but we'll have to wait and see. There's no real
feedback from the club on that. And we're pitching for another couple of players.
If I was a Newcastle fan, we're making the right noises on that front. I'm sure the fans are disappointed about the Joey situation but we are trying to take the club forward by signing players.