Mitchell says a deal was agreed back in 1999 which would have seen United essentially take over their Tayside rivals to form a new club called Dundee United City.
The new team - under the control of former United manager and owner Jim McLean - would have been based at the Terrors' Tannadice home and played in Tangerine strips
"Some people don't want to remember that that deal was done - those two teams on a Friday night had merged," Mitchell told BBC Scotland.
However, former Dundee owner Peter Marr - who was in charge at Dens Park at the time - has rubbished the former SPL boss' claims, telling the Dundee Courier: "It's total nonsense."
Although Mitchell says the deal eventually collapsed, he insists it was very much a possibility
The former league boss - who quit his SPL role in 2002 - reiterated his claims during a Twitter conversation on Friday, posting: "Mooted? It was done and dusted on Friday
Off, on Monday
He (McLean) had registered the name, the strips with us
As he had to
It was DONE."
While the two clubs' stadiums are separated by just 200 yards, a merger would have been highly controversial, with supporters of both sides deeply opposed to the plan.
But Mitchell, speaking to the BBC ahead of a forthcoming documentary series about the history of Scottish football, added: " They had come up with a new name
They had come up with the strip they would play in
"We had been told about that
We were ready to deal with it and what that meant for promotion and relegation
It was a crucial moment
It was two historic clubs merging."
Source : PA