The threat of a national postal strike grew last night when the union representing 120,000 staff said that it would distribute ballot papers for a vote on a walkout.

It would mark the culmination of months of wildcat strikes across the country over complaints about pay, job security and services. The walkouts have disrupted postal services.

About 20,000 staff have periodically been on strike since July and there is now a backlog of an estimated 20 million letters and parcels waiting to be delivered — about a quarter of the Royal Mail’s daily volume.

John Cridland, deputy director-general of the CBI, said that smaller businesses that rely on direct mail have been worst hit.

Some businesses have been able to insulate themselves by using e-mail more but internet retail companies have been badly affected. EBay, the online auction house, has told customers that deliveries are likely to be delayed by at least three days.

Postal workers in Cambridgeshire, Middlesbrough and London have been involved in strike action this week and walkouts are expected in Scotland next week. The result of the national ballot is likely to be announced early next month.

Dave Ward, deputy general secretary of the Communication Workers Union (CWU), said: “Without agreement there can be no successful change in Royal Mail. This is a simple message which Royal Mail management needs to take on board. Postal workers are striking to defend future services as well as for jobs and modern conditions.”

Mark Higson, managing director of Royal Mail Letters, said: “The ballot further underlines the CWU’s determination to renege on the existing 2007 agreement on pay and modernisation which the union’s leadership signed in the presence of the TUC.”

In July Lord Mandelson, the Business Secretary, told the House of Lords that proposed legislation to reform Royal Mail by selling a 30 per cent stake had been shelved. Had he been able to attract £3 billion for the stake and convince the 140 backbench Labour MPs who opposed the move, the Government would have taken responsibility for the Royal Mail pension pot.

The pension scheme has a deficit of £3.4 billion and a revaluation is expected to show a deficit of up to £10 billion. Such a shortfall would almost triple the sum that Royal Mail would have to contribute to the fund and plunge the postal service deeper into the red.

The pension fund is one of a number of areas of tension between the postal workers’ union and Royal Mail. It is widely feared that the CWU, which represents postal workers, and Unite, the union whose members include mail managers, would demand call for walkouts over any substantive change to pension arrangements.

Royal Mail workers say that promises made to modernise the network such as providing new sorting machines, have not been kept.

Brendan Barber, the TUC General Secretary, said yesterday: “I refute the lies put about that the union [CWU] is blocking change because that is simply not the case.”

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats