THE Government was urged last night to break its "deafening silence" over the postal dispute as the Royal Mail lost a £100,000 contract after tens of thousands of workers started a series of strikes.

The Communication Workers Union accused ministers of distancing themselves from the row over pay, jobs and pensions, which has flared into the most damaging industrial unrest in the service for nearly 20 years.

Warnings that the Royal Mail will start to lose customers were heightened yesterday when Warranty Direct said it would stop using the postal organisation to deliver 12,000 letters a month.

The car warranty provider said it will start emailing communications instead, saving the firm hundreds of thousands of pounds in postage and printing, and losing the Royal Mail £100,000.

Managing director Duncan McClure Fisher said: "As a business, we can no longer rely on the Post Office.

"The consumer is ready, so we feel it's right to abandon the traditional service in favour of technology, and I am sure we will not be the last business to make the switch."

Workers formed picket lines outside mail centres at the start of a 48-hour walkout at noon, which will be followed by another two-day stoppage from 3am on Monday.

Firms were warned that the strikes mean there will be no deliveries until next Thursday, and it is estimated that the row will cost industry millions of pounds.

The strike went ahead as planned despite last-ditch talks between the union and Royal Mail.

The two sides met at TUC headquarters in London, but there was little sign of a breakthrough as the postal workers began their action.

The Government refused to become involved in the dispute, making it clear it should be resolved by the union and management.

A spokesman for the Department for Business said: "The Government has been encouraging and will continue to encourage the parties involved to pursue and find a solution through talks.

"No one will benefit from strike action. Strike action can only damage Royal Mail's business and the postal services market as a whole.

"Royal Mail needs to modernise to compete in a liberalised postal services market. Management and unions must work together to achieve this and to meet the challenges of a liberalised market."

Billy Hayes, union general secretary, made his strongest public attack on the Government, saying it had shown "complete disinterest" in the dispute.

He said: "If this was Northern Rock they would be pouring money in. This is a company that they own and they seem to have no interest whatsoever.

"There is no indication of their concern in the slightest. The Government have been deafening by their silence."

Royal Mail said it was "hugely disappointed and extremely concerned" that talks aimed at resolving the row had not been successful.

A spokesman said the strike was designed to damage the company, its customers and its workers.

The spokesman said Royal Mail had offered both short and long-term solutions to the dispute, keeping within the 2.5 per cent pay increase it could afford this year.