A seven-day national postal strike could lose the Northern Ireland economy £34m, experts have warned.

According to the Centre for Economics and Business Research (CEBR) one week of strike action by 120,000 workers could particularly hit retailers across the province by an estimated £6.2m.

The figures were revealed as Royal Mail bosses and union officials were locked in crunch talks regarding possible strike action. No decisions were reached last night.

However the Federation of Small Businesses in Northern Ireland has warned a national strike could be “catastrophic” for already struggling firms.

The report said that nationally the UK would lose £1.5bn.

High street retailing, magazines and professional services will also be badly hit, while delays in receiving cheques could prove “fatal” to some firms, the report warned.

“Smaller businesses are likely to bear the brunt of these costs since 98% of small business post is through the Royal Mail, while only 70% of larger businesses use the Royal Mail and most of them use alternative mail sources,” said the report.

The postal executive of the Communication Workers Union (CWU) met to discuss when to call out their members following a huge vote in favour of industrial action.

CWU members are angry about the Royal Mail's handling of its modernisation programme.

Further talks are due to be held later this week but there is little sign of a breakthrough.

The officials discussed a number of options, including a nationwide walkout by all postal workers, or a rolling programme of action involving different groups of workers such as delivery and sorting office staff taking action on different days.

The union has to give Royal Mail seven days’ notice of any walkout, so the earliest strike date would be around October 19. Others could be staged in the build-up to Christmas.

Wilfred Mitchell, FSB policy chairman for Northern Ireland, said a national strike could be “catastrophic” for already struggling firms.

“The loss and damage of post can have a devastating impact on small firms which, in the worst case, loses trade and clients because cheques and invoices don’t arrive on time – sometimes up to three weeks late,” he said.

“At a time when small businesses are cutting costs and doing all they can to keep afloat during the recession, the postal strikes can have a disastrous impact on their cash flow.

“After a tough year and with Christmas fast approaching, this is a key time for small firms to ensure they are getting invoices and cheques paid on time, and products and services to their customers to ensure they can start 2010 in the strongest position possible so they can help stimulate the economy.”