UK - UK Coal is to close its final salary pension scheme after running up a £300m (€338m) deficit.

Posting a pre-tax loss of £124.6m and "three years of unacceptable performance" yesterday, chairman Jonson Cox said: "It will be clear to those who have followed UK Coal that the causes of these severe losses are deeply rooted and require a complete overhaul of strategy and execution."

Part of that strategy will involve the closure of the final salary pension schemes, "so as to divert funds to reduce the deficit", Cox said.

He claimed the 3,000-strong workforce had offered co-operation and help.

"The urgent need for further change has been communicated clearly to all colleagues and unions, and that the message is understood," he added.

A spokesman for the group said the closure of the pension scheme was a signal that Cox - appointed four months ago to rescue the company's financial position -  "had grabbed the bull by the horns".

Cox is currently trying to manage a corporate debt of £243m.

A strategic recovery review currently underway will further consider "the level and form of pension provision, cost and deficit funding". The review's conclusions will be announced in June.

With the mining business in decline, UK Coal plans to develop 85 sites from its 37,900-acre land portfolio over the next decade.

However, Cox acknowledged that forward valuations of the property portfolio at £820m by 2014 were "neither realistic nor deliverable" in current market conditions.