It reckons it needs the extra revenue to survive and says it's losing 6p on each stamped letter. It also wants to change the rules on franked mail.

Previously, it would attempt to make up the shortfall by increasing the price of business mail; however, increased competition in the business sector means it can't do that, the BBC reported.

Royal Mail is putting its proposal to the regulator Postcomm this week. If approved, the price of a first class stamp would increase to 38p and a second class stamp to 29p, although there is no indication of when the proposed increases would come into force.