Amid bitter mutual recriminations, the CWU is to go ahead later today with a strike ballot among 160,000 mail staff - unless the two sides can, improbably, square their differences at a final round of talks at Acas later today.
The strike by the left-led CWU, a key member of the "awkward squad" of unions, would begin in the second half of next month, in the run-up to Labour's conference, which will be dominated by policy rifts between government and union leaders.
Industry sources said the strike, which is viewed as inevitable by both management and the union despite today's talks, would prove catastrophic for Royal Mail. It is half way through a government-backed three-year "renewal" plan to restore profitability.
"A strike would be suicide," one source said, pointing out that Royal Mail could lose its monopoly on letter delivery earlier than planned and the union would be pitched against a government that had seen off the firefighters and would release no extra cash for Royal Mail.
The strike ballot will conclude on September 11, at the end of the TUC's annual congress, and is likely to trigger the intervention of Brendan Barber, the new general secretary, who played a critical role in settling the recent dispute at British Airways.
Yesterday's aborted talks, convened by Acas, did prompt Royal Mail to rejig its £340m pay offer, which is designed to bring the average basic pay of postal workers to £300 a week.
The company, which lost £611m last year and says it is still losing £750,000 a day, said it would now pay all the productivity elements of its offer, worth £26.28 a week, when changes had been agreed locally. Previously, it wanted to hold back £6.28 until a national deal was implemented.
Its tactic is seen by the CWU's executive as a manoeuvre to de-recognise the union by downgrading national bargaining - a claim rejected by Royal Mail - and is likely to provoke renewed bitterness.
This will be exacerbated by Royal Mail's decision to get local managers to set out its detailed offer in talks with individual members of staff. The CWU was enraged when Allan Leighton, Royal Mail chair man, twice went over its head to address staff in private letters.
Royal Mail insists that its offer is worth 14.5% over 18 months. But the CWU, which has dismissed it as "having more strings than the Philharmonic," says it is worth just 4.5% - with the rest tied to the loss of 30,000 jobs. Of these, 16,000 have already been agreed voluntarily.
The union claimed Royal Mail knew in advance that its postal executive would be meeting when the earlier Acas talks were due to take place.
Ray Ellis, senior negotiator, said: "If Royal Mail will negotiate, a dispute can be averted. If it will not, we will be launch ing a formal industrial dispute ballot."
A company source said: "We feel we are negotiating by ourselves and, while we are looking to find a solution, the union leadership isn't. We don't think our commercial turnaround is guaranteed to sustain a strike ... The union has moved us into a ballot and that damages both the company and its ability to fund its offer."
The company claims that feedback from local sorting and delivery offices suggested there was little appetite for a strike, but the union leadership insists it has strong backing, especially in London.
