BANK of Ireland's link with Britain's Royal Mail may be threatened by a new campaign aimed at establishing a state-run Post Bank without any ties to an existing financial institution.

The Post Bank coalition, which is supported by trade unions, government politicians and Britain's Federation of Small Businesses, wants the British government to offer a full range of banking services using the Royal Mail's network of over 11,500 post offices.

The Royal Mail's current joint venture with Bank of Ireland has around two million customers and over €6bn in deposits.

A spokeswoman for the Communications Workers Union (CWU), one of the unions supporting the coalition, told the Sunday Tribune that it wanted to provide "a genuine alternative to commercial banks".

"It would involve a new approach to banking driven by sound financial practices and social enterprise rather than big bonuses and shareholders' demands," she said.

Asked whether Bank of Ireland could have a role in a Post Bank, she said the coalition was opposed to the recruitment of joint venture partners.

"We don't want to muddy the waters with the failed banking sector."

The coalition has so far stopped short of calling for the termination of Bank of Ireland's deal with the Royal Mail, due to run until 2020, saying the current arrangements could function side-by-side with Post Bank.

But some sources believe the establishment of a Post Bank would kill the current joint venture as it would undermine its commercial viability.

A spokesman for the Royal Mail said the company couldn't talk about hypothetical situations but said "we have made it very clear that our partner, Bank of Ireland, will be involved in the future development of our products".

Meanwhile, a Bank of Ireland spokeswoman said it was not the bank's place to comment on British post office policy. Asked whether there were any break clauses in its contract with the Royal Mail, she said the bank "does not discuss the contractual terms of any joint venture".