Royal Mail fears that its finances are so bad that its pension fund trustees could put it into liquidation to pay off a £3.4 billion deficit.

The postal group has told unions in private that it is possible that the trustees could be legally obliged to demand that Royal Mail be wound up to pay the bill.

Executives are painting a bleak picture of Royal Mail's health, at a time when the company is embroiled in a row with unions over its plan to close its final-salary pension scheme, raise the retirement age from 60 to 65 and cut its contributions.

Unions have also been told that Royal Mail's profits for 2010-11 could be as low as £50million if present conditions continue. Executives say that the letters business has declined, with volumes dropping in competition with e-mails, internet advertising, other operators and customers trading down for services.

That is short of the amount envisaged a few years ago when Allan Leighton, the chairman, was trying a partial privatisation of the business by bringing in outside investment and giving the workforce a stake. He had predicted that the business would be worth £4 billion in that financial year.

Royal Mail's trustees, who meet on Thursday, are expected to back the proposed changes to the pension scheme from April 1, under which the business will cut its contributions from 30 per cent to 21 per cent, comprising 10 per cent for the deficit and 11 per cent for future pensions. At present the total annual cash contribution is £850 million.

However, the threats have yet to have any impact on employees. Postal managers have voted already by 85 per cent to oppose the changes in a consultative ballot and more than 150,000 postal workers are in the process of voting. It is expected that postal workers will reject the pension changes in a ballot that is due to close the day before the trustees' meeting. With unions and management seemingly at a stand-off, postal services are likely to be crippled by industrial action again, only months after the last wave of national strikes over pay ended.

Royal Mail has twice delayed the usual reporting of its financial figures. The latest figures published relate to the year ending in March last year and they show a profit fall of 34 per cent to £233 million. Since then the business has been hit by the worst industrial action in decades.

Paul Reuter, national official with Unite, the union that represents postal managers, said: “The unions actually want this business to be managed. We are very concerned about the state of it. We don't think that Royal Mail has the capacity or the will to work in a competitive environment.”

Mr Reuter said that he blamed the Government for appointing “Laurel and Hardy” to run the business, referring to Mr Leighton and Adam Crozier, the chief executive.

The clash over pensions comes as Royal Mail and the Government are facing a political backlash over the closure of 2,500 post office across the country. Ken Livingstone, the Mayor of London, is seeking a judicial review of closures in the capital.

The Government is conducting a review of the impact of competition on Royal Mail. The company is pressing to be released from some of the obligations set out in its licence.

Royal Mail said that it would not comment on its private discussions with unions.

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