The 200,000 postmen and women voted by 14-1 yesterday in favour of a deal hammered out after more than 13 hours of talks at the Department of Employment on Friday.

They had been demanding a 13% pay rise - but they have settled for a complex package which will award them wage increases after an inquiry into the efficiency of Post Office staff and management.

Strikers are disappointed because they are being asked to return to work without even the 8% rise offered when the walk-out began on 20 January.

The strike has cost the average postal worker about £150 in lost earnings over the seven weeks. It has cost the Post Office an estimated £25m in lost revenue.

Binding

Post union general secretary Tom Jackson had urged his members to return to work saying it would be unable to make any more "hardship payments" to the 30-40,000 members who had no income at all.

At a rally in Hyde Park on Friday, Mr Jackson was jeered when he announced the terms of the deal. Members called "Sell out" and "Hey, hey, Tommy J, how about our £3 pay?"

Under the terms of the deal, the outcome of an agreed independent investigation would be binding on the Post Office and the union.

Mr Jackson hopes any pay increase will be backdated to January.

But the deal represents a defeat for Mr Jackson who had set his face against arbitration.

He said: "If we had had more money, the strike would have gone on. Facing the reality, this is the best way out of a bad position."

Postal services have resumed today but it is expected to take some time before the backlog is cleared.

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