Prescott 'threatens' Royal Mail strikers

John Prescott, the Deputy Prime Minister, issued a veiled threat to striking postmen yesterday that the Royal Mail could lose its monopoly if its staff failed to reform working practices.

In his first intervention in the affair, Mr Prescott compared the dispute to the firefighters' strike and insisted that the workers had to accept modernisation and change. His remarks echoed those of Adam Crozier, the Royal Mail's chief executive, who warned that the company could be destroyed by other competitors if the wildcat action continued.

Management and unions met again yesterday to find a way out of the logjam but chaos continued nationwide, with 20,000 postal workers still on strike. London, Essex, Oxford, Warrington, Portsmouth and Milton Keynes have all been hit and a huge backlog of undelivered mail continued to mount.

Mr Prescott was asked by BBC1's Politics Show if he now had to make a "strategic decision" about the Royal Mail's monopoly to carry letters.

The Deputy Prime Minister said: "Those kind of strategic decisions are partly coming out of Europe because they've made certain decisions about competition. There's adjustment and change-making in our industry, and these proposals, already under way, are coming from the regulator. It's that process of change to adjust to. The Post Office is a public service. In the main, a lot of people rely on the postman knocking on the door. So we have to hope this will be ... worked out."

He added: "I had a similar problem with firemen. They had a particular point of view and we had to negotiate about that. We are not party to [these] negotiations but it is about modernisation."

Mr Crozier warned that wildcat strikes could ruin the Royal Mail. "In the last two years, we've lost £1.8bn and we need to turn this company around," he told BBC1's Breakfast with Frost. "We've got competition... from electronic media and also from the regulator, which is bringing in other carriers. If we don't sort this out, if we don't modernise, we won't have a future." He said taking legal action against striking workers remained a possibility.

Talks between the Royal Mail and the Communication Workers Union were held on Saturday and resumed yesterday. The two sides are due to go to the arbitration service, Acas, today.

¿ Strike action by up to a thousand baggage handlers and check-in staff yesterday caused minor disruptions at Heathrow airport. The workers employed by Swissport started a 48-hour walkout at 4.30am, but only a handful of flights were cancelled. Swissport had said that it needed to restructure the business, but the workers' union insisted that a pay rise should be given before the changes.