The Communication Workers Union, which represents 130,000 Royal Mail staff, is to press ahead with a 24-hour walk out on June 29 after the union and senior management failed to find middle ground over a 2.5% pay rise and better working conditions.
This is the first strike action in 11 years, and the CWU has planned dates to "maximise the impact on Royal Mail but at minimum cost to CWU members". A second 24-hour strike will follow two weeks after June 29.
In an attack on Royal Mail's management, Dave Ward, deputy general secretary at CWU, said: "What the Royal Mail are doing is not modernisation. The truth is they are intent on cutting services, cutting jobs and cutting pay."
The CWU has rejected claims it was demanding a 27% pay rise for staff, and has urged Allan Leighton, chairman, and Adam Crozier, chief executive, to "stop sitting on the side lines, get their hands dirty and get involved in serious negotiations".
Royal Mail has hit back at the union's planned strikes, stating the decision "would only add to the very difficult competitive challenges" facing workers, and would disrupt customers.
In a statement, Crozier said: "We remain very willing to sit down with the CWU to explain again the absolute need for Royal Mail to modernize and to underline how damaging a strike would be for postmen and women, and our customers.
"We are losing business because we have failed to change and modernize -- and as a result our costs and therefore our prices are higher than those that rivals are charging in the intensely competitive business mail, which makes up 90% of all postings."
Crozier added that unless modernisation took place, the future for the company "looked bleak", highlighting how Royal Mail has lost 40% of bulk business mail to rivals who are undercutting its prices.
Howard Webber, chief executive of postal users' group Postwatch, said the watchdog was "disappointed" that strike action was being taken, but that it had hopes for progress next week that could result in it being called off.
He said: "The two sides should keep talking to find the way forward...In the 21st century there must be better ways of resolving industrial disputes."
The news caps a troubling week for Royal Mail, which lost the £8m Amazon second class mailing account after claiming that failure to modernise practices had made it less competitive than its rivals.