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Recently we introduced our 12 week old German Pinscher to my inlaws dog... a 7 year old Red Heeler. Sadly the red heeler is scared of our puppy, and is exceptionally suspicious of him. She will cry and yelp and hide in corners when he is around. When he does try to come up towards her she tries to nip him. We have been introducing him to her while he is on a leash, thinking that that way he can't lunge at her in play mode, and be too rough towards her. The red heeler has been known to show agression towards dogs in the past, but so far hasn't done anything other than growl and nip. However, I am a little worried to let our puppy loose and let them 'work it out'. Any suggestions? Our pup is mystified that someone doesn't seem to want to play with him!

I'd just keep doing what you are doing. Especially if the heeler has been known to get aggressive. It isn't an altogether bad thing that the heeler is teaching the pup to back off. The pup needs to learn that not everyone = playmate. and it sounds like the heeler is doing this respectfully enough so far. If you keep pup on umbilical then it probably won't ever get out of hand.

Do you walk them together or just go over and visit in their home/their turf? I'd start walking and doing things together and maybe the heeler will relax a bit with time.