Online retailer Amazon has reportedly cancelled its contract for certain items with Royal Mail after continued strike action threatens its pre-Christmas deliveries.

The online giant has cancelled its long-term contract for parcels over 500 grams and will instead use rival delivery service, Home Delivery Network, according to The Guardian.

The contract – Royal Mail’s second biggest customer – is understood to be worth at least £25m. It is understood customers of auction site eBay are also worried about strike action which they have said causes damage to small businesses that suffer negative feedback and lose their online reliability ratings.

The Communication Workers Union is threatening to strike over Royal Mail’s handling of its modernisation programme and consultation over changes to working practices.

Two years ago Royal Mail lost a small Amazon contract worth £8m to deliver second class parcels during the last national strike, but fought hard to win the business back.