Postal workers have voted in favour of industrial action in a dispute over the sale of the Royal Mail's cash handling business to the private firm Securicor.

Members of the Communication Workers Union (CWU) voted in favour of strike action by 95%.

But the strike may yet be averted, after Securicor withdrew its original offer for the Royal Mail business within hours of the vote.

The CWU said it was awaiting formal confirmation of Securicor's position before reconsidering its strike call.

Securicor has said it would examine other ways of progressing the acquisition.

About 3,000 workers are employed by the Royal Mail in its cash-handling operations, which deliver notes and coins to the UK's 17,500 post offices, as well as 2,000 other organisations.

Last week, the government referred the planned sale to the Competition Commission.

Union anger

In September, the Royal Mail said Securicor had been chosen as its preferred supplier of cash services.

The 10-year contract was worth �1bn.

But unions were furious at the move, describing it as "blatant privatisation".

Following the strike ballot result, the CWU said it would meet on Tuesday to decide on what form the strike would take.

Industrial action could mean post offices run short of cash and may not be able to provide a full range of services.

Restructured deal?

But shortly after the ballot result was announced, Securicor said it was withdrawing its original offer.

"We can confirm that our current proposal for providing cash handling and distribution services to the Post Office, which was submitted to the OFT in September, has been withdrawn," the firm said.

"We are working closely with Royal Mail Group to examine means of restructuring arrangements for the benefit of both parties."

But the CWU said it would still be meeting on Tuesday to discuss action.

"The dispute continues until we have something formal from the Post Office to say they will abandon their proposals," said CWU deputy general secretary John Keggie.

Complex business

The Royal Mail - which has now abandoned the unpopular Consignia name - currently operates 40 cash-in-transit depots in the UK and uses a fleet of 700 vehicles to move the money.

It also has 20 cash centres where the money is counted, processed and stored.

In September, Securicor said that if it won the contract it would carry out about 1.6 million cash transportation services each year, involving �37bn in notes and �2bn in coins.

The Royal Mail has been seeking to restructure itself to try and stem huge losses.

Earlier on Thursday, it announced it had cut losses by a third, but it was still losing �1.1m a day.