Royal Mail says it is implementing changes to its working practices in an attempt to bring its service in to the 21st century, as agreed with the Communication Workers’ Union.

But the union says the company is bringing in changes which go far beyond what was agreed, including cutting jobs, pay and services.

At the heart of this week’s two-day strike is Royal Mail’s need to modernise, a critical issue for a company struggling to find a profitable

place in a world dominated by electronic communication.

As stationery and stamps are replaced by e-mails and text messages, Royal Mail is losing around £170m a year as the volume of letters and packages dwindle.

In the past few months alone, more than 70 meetings have been held between Royal Mail and the Communication Workers’ Union (CWU) in a bid to create common ground on modernisation and smooth out increasingly hostile discussions.

Unions accepted in 2007 that radical changes were required if the company was to survive, agreeing that

job losses would be likely as the firm adapted in the digital age. A commitment of meaningful negotiation was signed and sealed.

But it would appear that the CWU has little appetite left for talk, with more than 100,000 workers due to walk out in a national strike on Thursday and Friday in a move which would freeze postal deliveries for homes and businesses across the UK.

The union has concurred that three out of four phases of the 2007 agreement have been carried out with “full

and frank” dialogue, but

claims Royal Mail has failed to deliver on the most controversial element – how modernisation will affect those postal delivery workers on the ground.

Royal Mail claim this is not the case, with strongly worded calls from chief executive Adam Crozier for the CWU to retake their seats at the negotiating table. Today last-minute talks are due to be held after a weekend of deepening and increasingly bitter divisions.

Over the past two days, the CWU claimed Royal Mail is planning to shed 60,000 jobs over the next two years.

The company rejected the figure but could not pinpoint a more accurate level of job losses.

Meanwhile, Royal Mail announced that 30,000 temporary workers will be hired in the run-up to Christmas to soften the impact of any industrial action, a move deemed illegal by the CWU.

Following the 2007 agreement, the Government, the sole shareholder in Royal Mail, set to work to underpin the firm’s modernisation programme.

In January, the lengthy Hooper Review into the state of the service recommended that the UK follow, in part, the European example and bring in a private firm to run a section of the business.

The development led the business secretary Lord Mandelson to excitedly declare that “a gale force of fresh air” could be blown into Royal Mail’s management style.

However, in a demonstration of the political sensitivity of the postal issue, and given a brewing back-bench revolt and fraught industrial relations, Lord Mandelson later sidelined the issue.

CWU, which also wants the government to tend to the £10bn deficit in Royal Mail’s pension pot, is particularly concerned about the arrival of walk-sequencing technology and the impact it could have on staffing levels.

The device is used in Germany and Holland, which both have privatised mail services, to sort mail in the order that will be delivered. The Hooper review noted that it is used to sort 85% of mail across both countries. The report said the same job takes around two to three hours to do by hand in the UK.

The report, backed by the Government, further inflamed the CWU by suggesting that some postal workers go home when they have finished their round, not their paid hours, and this could be in some cases three hours early.

Dave Ward, deputy general secretary of the CWU, warned over the weekend that postal workers were in a “battle over the future of the industry ... It [the dispute] is on a scale which comes along only every 50 or 60 years.”

Lord Mandelson described the strike as “suicide” which could crush the firm’s ability to compete in the marketplace. Royal Mail’s ­second-biggest customer, online retailer Amazon, has already dropped part of its contract to avoid the impact of industrial action on customers.