More than 160,000 Royal Mail workers today started voting on strike action, despite a management warning that a stoppage would be "commercial suicide".
Leaders of the Communication Workers Union issued ballot papers as they met the management at the conciliation service Acas for peace talks aimed at ending their dispute over pay.
The two sides met yesterday afternoon for a fresh round of negotiations but announced last night that they had failed to reach an agreement on how to avert what may become the first national walkout in seven years.
Earlier, Allan Leighton, the Royal Mail chairman, insisted in a letter to staff that the "final" pay offer could not be improved. The company says the offer is worth 14.5 per cent over 18 months, but union leaders say there is only 4.5 per cent on the table, with the rest linked to productivity improvements.
Mr Leighton said the group had lost £611m and needed to put an extra £100m a year into its pension fund. He said: "In this context, the 14.5 per cent on the table is an incredibly good offer, the best for 10 years.
"It is important that every-one understands that a vote to strike will result in a strike and that the company will not, at any stage, be able to improve its offer."
He said that yesterday was a watershed for the company and a strike could cost £20m a day. "If you vote with the activists among the union against the deal, or do not vote, we begin the process of commercial suicide."
Mr Leighton said that a strike would ensure the business could not recover from past losses, "putting everyone's future at risk". He said the Royal Mail was prepared for months of strikes, potentially up to and beyond Christmas.
Ray Ellis, a union negotiator, said: "What has been very disappointing is that the business seems to have diverted all its efforts on to a propaganda war with the union rather than entering meaningful negotiations. We have made progress but there is more talking to be done and the business appears to be saying they are closing the talks by issuing a final offer."
Adam Crozier, the Royal Mail's chief executive, had not been expected to join the talks, but arrived at Acas to lead the firm's negotiators. He said: "We are taking this meeting very seriously indeed. We want to see if we can sort things out but we need a sense of realism on the part of the union, given the state the company is in, and we don't need any window dressing from them."
To save money, Royal Mail wants to scrap the second delivery and cut 30,000 jobs.
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