LANCASHIRE'S 8,000 BAE Systems workers are threatening strike action if the company goes ahead with its plans to cut retirements benefits.

The Transport and General Workers' Union and Amicus, the engineering union, are meeting senior BAE management today in a bid to avert a damaging national dispute.

"The mood of our members is unmistakable," said national organiser Jack Dromey, after a meeting yesterday with union leaders. "They will take industrial action to defend their pension rights."

Barry Culshaw, works convenor for the Lancashire BAE plants, was part of the union's negotiating team for the showdown meeting with management.

"Our position has not changed from day one," he said.

"If BAE alters its pension scheme in any way that is detrimental to our members, we will ballot for industrial action."

BAE is understood to be facing a £2.16 billion 'black hole' in its pension scheme.

It wants to both reduce benefits to its pensioners and increase contributions from workers by an additional two per cent.

BAE's 'final salary' pension scheme is one of the most generous in British industry.

However, its pension fund has been hit by continuing falls in the value of its investments following the collapse of the Stock Market over the past two years.

The unions claim the company took a 'pensions holiday' in the mid-1990s when it paid nothing into the fund and was now asking its members to make up the shortfall.

BAE last week reported a £616 million loss for last year after massive overspending on the Nimrod maritime patrol aircraft and the Astute submarine programmes.

BAE Systems management was unavailable to comment.