Postal workers to strike over pay on June 29

The walkout - the first of several threatened 24-hour strikes - will be held next Friday, in what critics say amounts to a return to Britain's industrial Dark Ages.

It is likely to bring havoc to mail deliveries, with letters taking up to five days to reach their destination, and will force hundreds of Post Office branches to close.

The strike could also delay payments on credit cards, loans, and water and power bills, leading to punishing charges for thousands of customers.

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The Communication Workers Union announced the strike after talks with Royal Mail bosses failed earlier this week.

The union is pushing for the average postal worker's salary to increase from £19,000 to £24,000 over the next five years.

But Royal Mail chiefs say the increase - which equates to a 27 per cent pay rise - cannot be considered at a time when the organisation is facing stiff competition from private rivals.

They claim the pay demands would cost the organisation £1billion and have offered staff a 2.5 per cent pay increase.

On top of this, there would be an £800 dividend payment from its Colleague Shares scheme and a 50 per cent share in any savings above budget in an employee's local unit.

Deputy general secretary Dave Ward said: "We have tried to reach an agreement but Royal Mail are refusing to negotiate.

"Royal Mail have been deliberately misleading the public on what this dispute is about. The Union has never asked for a 27 per cent pay rise and we are not opposed in any shape or form to modernisation.

"What Royal Mail is doing is not modernisation. The truth is they are intent on cutting services, cutting jobs and cutting pay."

Some 66,064 of the CWU's 127,000 members voted for strike action but it is not clear how many will take part.

Although the CWU makes substantial payments to the Labour Party, Trade Secretary Alastair Darling has already said there will be no cash hand-outs to fund higher pay rises.

He told the Commons Trade and Industry Committee: "I very much hope that it is resolved without strike action being taken because that would be extremely damaging for the business as well as being damaging for its customers."

Royal Mail chief executive Adam Crozier said the strike would only add to the "very difficult competitive challenges" the organisation was facing.

"Royal Mail will do all it can to mitigate the impact of strike action but we are very disappointed for our customers at the disruption they are now facing," he added.

2We remain very willing to sit down with the CWU to explain again the absolute need for Royal Mail to modernise and to underline how damaging a strike would be for postmen and our customers."

He said the Royal Mail had lost business, including an £8million contract with online retailer Amazon, because it had failed to modernise.

A spokesman for The Federation of Small Businesses said: "A strike will have a huge negative impact on the UK economy and the Government should not sit on the sidelines and allow that to happen."

Howard Webber, chief executive of the postal watchdog Postwatch, said: "If the strike action takes place it will needlessly inconvenience and confuse customers. In the 21st century there must be better ways of resolving industrial disputes."