Up to a third of Royal Mail could be privatised in a radical overhaul alongside a speeding up of modernisation plans.

The move means potential job losses and offices across the country are now planning strike action on Friday - the last day for first-class Christmas post in protest.

The plans were laid out in a review of the service by Richard Hooper, the former deputy chairman of Ofcom published today.

The public service could be facing a pensions deficit of up to £7billion and the report included a proposal for the Government to take over liability for the debt.

The Communication Workers Union has spoken out against the plans.

General secretary Billy Hayes said: "When the banks are being nationalised and everybody is seeing the failure of the private markets, why would the introduction of private capital be the answer to the future of the British postal service?"

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The company has increasingly struggled with falling profits as private postal services have flooded the market in recent years and more of the population have turned to the internet as a method of communication.

The report said Royal Mail had missed out on a potential £500m of profits over the past year.