Neil Clarke told delegates at the annual conference of the breakaway Union of Democratic Mineworkers that half the white-collar and managerial staff would have to go if the industry was to remain competitive.
Mr Clarke was relaying the gloomy message to miners who helped to break the 1984-85 strike, many of whom yesterday felt betrayed by both the Government and management.
The coal board chairman also warned that imminent pay negotiations would not result in an increase of more than the government-imposed limit of 1.5 per cent and indicated that there would have to be agreement to new working practices involving longer shifts under ground.
Before the strike there were 27 collieries in the UDM's Nottinghamshire heartland, employing 30,600 miners. Last October there were just 13 pits employing 11,000. Now there are 10 collieries with 6,700 pitmen, three of which are being 'market- tested'.
Mr Clarke, who faced a barrage of hostile questions at the conference in Weymouth, Dorset, said he 'deeply regretted' the fresh job losses, but they were necessary to save the industry. White-collar jobs would have to go to remove 'an unnecessary burden on our collieries'.
The industry would have to 'run fast' to keep up with the pace of change in the power generation and electricity market, he said.
The threat from competitors had increased on two fronts. New gas-fired power stations showed they were reaching full capacity early and running at high efficiency levels. Nuclear stations had also maintained improved levels of productivity.
Outside the conference, he said: 'Unless we are competitive, the consequences will effectively be the closure of more pits.'
Talks will be held over the white-collar job losses over the next few weeks but they will be spread across the country, hitting Yorkshire, Nottinghamshire and the London headquarters of British Coal, and will involve senior managers, administrators and clerical staff.
Mr Clarke told the conference that recent events would mean a delay of at least a year in the privatisation of British Coal. But the business could not be held in 'suspended animation' and Mr Clarke said he would be pressing the Government to clarify the subsidy announced at the time of the White Paper designed to save pits.
Delegates politely applauded Mr Clarke when he arrived but they later vented their anger during a 30-minute question and answer session.
Neil Greatrex, the union's president, said he was 'disappointed' with Mr Clarke's speech and said it was clear that the Government was now running British Coal. 'The white-collar job losses ought to include senior people at British Coal because they have let miners and the country down.'
Mr Clarke was presented with a statue of four miners carved out of coal, just to prove there was a market for extra coal sales, said Mr Greatrex.