Pilots call off strike as mail row escalates

'Olive branch' after post union calls stoppages. Barrie Clement reports on a day that

An indefinite strike by pilots at British Airways from next Tuesday was called off last night. Meanwhile, a glimmer of hope emerged in the Royal Mail dispute.

After days of negotiations, leaders of the British Airline Pilots' Association (Balpa) agreed a 3.6 per cent pay package together with improved salary rates for lower-paid flight crews operating out of Gatwick - avoiding what could have been the most damaging industrial action since the miners' strike more than a decade ago.

The BA settlement negotiated by Balpa includes improved rates for qualified pilots newly employed by BA and the reinstallation of bunk beds on jumbo jets for the use of flight crews on long routes. There is also a commitment to a better working relationship between management and the union.

Chris Darke, leader of Balpa, said the action would be suspended while his members voted on the package, but he thought it represented a "great success". A spokeswoman for BA said the "real winners" had been the customers.

Hopes rose for a settlement in the Post Office conflict last night despite an earlier decision by leaders of 130,000 Royal Mail workers to order a serious escalation of industrial action.

While ministers were preparing to suspend the Post Office's monopoly on the letter post during future strikes, a letter from Richard Dykes, managing director of the Royal Mail to the Communication Workers' Union presented the possibility of fresh talks.

Earlier yesterday, however, the dispute appeared to be entering a far more serious phase with the union calling four periods of action ranging from 24 to 48-hour stoppages.

Sources at the Department of Trade and Industry yesterday confirmed that the Post Office's sole right to handle letters for less than pounds 1 could be lifted during the walkouts.

Ministers warned that as soon as the monopoly was suspended there would be a clamour from backbenchers and from private delivery firms to make it permanent.

Alan Johnson, joint general secretary of the union, announced a 24-hour stoppage from 3am next Thursday; a 36-hour strike from 10am on 26 July; 48 hours from 3am on 31 July, and 24 hours from 3am on 6 August.

The letter from Mr Dykes to to Mr Johnson pointed out that there had been a misunderstanding between the two sides when talks finished on Tuesday. Mr Dykes said there was no suggestion that management wanted to predetermine the outcome of productivity talks and that there was no question of the Royal Mail insisting that industrial action be abandoned - simply that it should be suspended to allow further talks.

A union spokesman said that the clarification from Mr Dykes seemed to be an "olive branch", and the union would enter talks on that basis as soon as possible.

The dispute centres on the Royal Mail's insistence on "team-working" and on the union's demand that a proportion of letters should be set aside for the second delivery.