Ashley, who was at the Britannia to watch their 1-0 defeat against Stoke, agreed to the clause when he handed the manager an eight year contract in September 2012.
The Newcastle owner has dramatically cut costs at St James' Park in the past couple of years and is reluctant to get into the expensive business of hiring and firing managers.
Newcastle owner Ashley denied he was being serious when he said he would sack Pardew if he lost to Stoke
Prior to the game, Ashley said he would sack Pardew if they lost to Stoke but his lawyers then insisted the Newcastle owner had been joking.
The boss of Sports Direct came out with the comments while leaning on the wall outside a pub in London’s trendy Soho district.
According to The Independent, he said Pardew had: ‘One more game — if we lose against Stoke on Monday night then he’s gone. I have had enough.
‘Dead. Finished. Over. One more game then that’s it. What would you do? I have spent a lot of money on that club, it’s cost me a lot. I won’t put up with it any more. Honestly, answer me, what would you do? One more loss and he’s gone, he’s over, finished.’
On Saturday night, Ashley’s lawyers maintained: ‘Mr Ashley responded, tongue in cheek, that Mr Pardew had two more games before being sacked.
‘To put this into perspective, over the past few weeks certain reports have stated that they believe that Mr Pardew has two more games before being sacked. Mr Ashley was therefore humouring the reporter.’
Whatever the reason for his words, it is one more embarrassing affair for the eccentric chairman who bought Newcastle in 2007 at a cost of £55million and has been at odds with the fans almost ever since.
The report says Ashley was leaning against the wall of The Golden Lion pub in Soho’s Dean Street, enjoying a drink with a friend, when the exchange happened.
A man with a reputation for flambouyant dealing in the city - this week he bought £43m worth of Tesco shares - he can be colourful when he is out. He was once seen on TV downing a pint of lager in one go at an Arsenal game.
Asked about whether he had told Pardew about his decision or lined up a replacement, Ashley is reported to have said: ‘That’s all I’m prepared to say about it and now that I’ve said it, it’s out there. You can do what you want with it. There’s only so much I can take.’