FERRY workers are to be balloted for strike action after lifeline services connecting Orkney and Shetland to the mainland were handed to a private company.

The vote for industrial action by members of the National Union of Rail, Maritime and Transport Workers (RMT) comes amid claims staff pensions will be cut, jobs axed and new flexible working arrangements introduced.

The RMT accused Serco, which is due to take over Northern Isles services next month, of reneging on pension agreements staff had with publicly-owned Northlink, which oversees the routes.

Bob Crow, the RMT's general secretary, said: "This whole botched privatisation plan has descended into chaos with Serco now looking to rip up long- standing pension commitments to the staff who deliver these lifeline services."

Serco, whose takeover of the route was delayed after a rival bidder complained, has provoked complaints from Orkney residents over reducing the frequency on the Scrabster-Stromness route from three to two sailings per day outwith the summer peak season.

Jamie Ross, business development director at Serco, said: "Over the coming weeks we will continue working with both the unions and employees to discuss a number of issues."

A spokeswoman for Government agency Transport Scotland which oversees ferry services, denied the service had been privatised, saying it was legally obliged to tender for public services.

She said: "While the transfer of staff is a matter for the new operator, Serco, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) rules will apply and Serco will be working with NorthLink, the outgoing operator, during the handover period to transfer staff over."