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Last Updated: Wednesday, 20 June 2007, 19:32 GMT 20:32 UK
Royal Mail talks end in stalemate
Royal Mail postman
Royal Mail says it cannot afford a bigger pay offer
Talks between Royal Mail officials and union leaders to avert a series of strikes have ended without agreement.

Both sides met on Wednesday at conciliation service Acas, where Royal Mail insisted it could not afford to raise its raise its 2.5% pay offer.

The Communication Workers' Union (CWU) said that proposal had been "rejected" by its members, but added that it was open to further talks over pay rises.

CWU leaders will meet on Thursday to decide whether to call strikes.

The union's members voted for strike action - the first in the UK since 1996 - by a majority of 77%, on a turnout of 60%.

Contingency plans

If talks do not resume on Thursday, then the CWU executive could announce dates for industrial action, which would impact deliveries around the country.

The CWU would have to give at least seven days' notice of strike action, Royal Mail said.

We continue to do all we can to persuade our people not to strike
Royal Mail spokesman

"We remain hopeful that our people fully understand the damage that any industrial action will have on our customers and therefore our business and our future," a Royal Mail spokesman said

"We want to avoid any unnecessary disruption to the service we provide to our customers, and we continue to do all we can to persuade our people not to strike."

The group said it had developed contingency plans which will be put in place in the event of walkouts.

The latest talks with the union come a day after Royal Mail lost a contract worth 8m from online trader Amazon.

Royal Mail officials said the contract loss showed that it had to improve its efficiency still further to be better able to compete with its newer rivals in the postal delivery industry.

Yet the Communications Workers' Union (CWU) also wants Royal Mail to abandon its modernisation plans, claiming they will result in 40,000 job losses.

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