The boss of the Royal Mail should forgo a lucrative planned pay rise if controversial proposals to lay off 1600 staff go ahead, Labour have warned.

Shadow minister for trade and investment Ian Murray said: "There can be no bumper pay increase for the chief executive of senior staff while people are losing their jobs."

The call came as it emerged that the plan, described as "ruthless" by unions, could trigger strike action.

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The head of the Royal Mail, Moya Greene, is due to receive a large pay rise to her current salary, thought to be around £500,000.

But controversial new efficiency plans designed to save £50 million a year have provoked a furious row.

Royal Mail insists the cuts are necessary to allow it to compete with its rivals.

But the Unite union accused it of "ruthlessly sacrificing jobs" and warned it could face strikes. The job losses are thought to involve mainly operational and head office managerial positions, not frontline postal workers.

Royal Mail has also announced plans to create 300 new posts.

Coalition ministers have already been accused of selling it off on the cheap.

Brian Scott, national officer of Unite, said: "We do not believe that it's a coincidence that this announcement has been made just before the company prepares to announce its first full set of accounts since privatisation."

He said the union was demanding a commitment to no compulsory redundancies.