CORRECTED - UPDATE 2-UK postal workers suspend strike action

Fri Nov 6, 2009 8:15am GMT

(Corrects number of postal workers in sixth paragraph to 121,000 from 21,000)

* Strikes halted until after Christmas

* Definitive agreement still to be reached

(Adds quotes, detail)

By Stefano Ambrogi

LONDON, Nov 5 (Reuters) - British postal workers said on Thursday they would suspend strike action until at least after Christmas under an interim agreement reached between unions and state-owned Royal Mail.

Brendan Barber, head of union umbrella group the TUC, told reporters that no definitive agreement had been reached to resolve a long-running row over jobs, pay and modernisation.

However, he said strike action had been suspended pending further efforts to settle the dispute and to prevent disruption of deliveries at the busiest time of the year.

"The agreement provides for a period of calm, free of industrial action, to enable negotiations to be held over the next couple of months through to the end of the year to secure the longer-term agreements necessary on all aspects of modernisation of Royal Mail," Barber said.

"The delivery of the terms of this agreement means that Royal Mail services will be free of any disruption up to and through the Christmas period," he said.

A third wave of national strikes, which the Communication Workers Union said would have involved all 121,000 staff, was due to have taken place on Friday and Monday.

The dispute has already caused widespread disruption to postal services and cost the British economy and retailers over a billion pounds.

The stoppages have also been a major embarrassment for Prime Minister Gordon Brown, whose governing Labour Party is trailing in opinion polls ahead of an election due by next June.

Brown wants to head off any possible winter of discontent brewing on the horizon as government and businesses tighten their belts during the sharp economic downturn.

Unions representing British Airways BAY.L cabin crew on Thursday said they would go ahead with a strike ballot and workers at IT service firm Fujitsu's UK arm said they would hold a three-day national strike starting on Nov. 12.

Business Secretary Peter Mandelson and Royal Mail's managing director Mark Higson, who have both denounced the industrial action as "suicidal", welcomed the news.

"I hope very much indeed that we will not see further strikes," Mandelson told reporters.

"I hope very much indeed that if there are issues that have got to be resolved, if there are wrinkles in the modernisation process -- which is absolutely vital for Royal Mail -- that these wrinkles will be smoothed out by discussion and negotiation without resorting to further strikes in the future."

Royal Mail's Higson said he looked forward "to positive and constructive discussions" on the next stage of the modernisation plan. (Additional reporting by Adrian Croft; Editing by Keith Weir)