Royal Mail could be allowed to set the price for stamps under proposals from regulatory body Ofcom to be revealed in the next week, according to reports.
The plans will only apply to first class stamps, ensuring that the cost of using the postal service will remain accessible. A first class stamp currently costs 46p and a second class stamp 36p.
Regulators have had the final say over the postal industry in the past, making this a groundbreaking move for the Royal Mail, which has suffered from the popularity of texts and emails.
The service only carries 62m pieces of mail compared to 80m five years ago, but it is still bound by Universal Service Obligation to ensure that one price means a piece of post can go anywhere in the UK, six days a week.
At the moment around 80 per cent of the Royal Mail is regulated by Ofcom, who took over from Postcomm at the beginning of this month.
The anticipated changes to price restrictions are in-line with changes called for ahead of its future privatisation. Royal Mail chief executive Moya Greene argued that unless regulatory changes were made, the company would collapse.
Greene is expected to stimulate a massive shake-up at the company to increase profits. Nicknamed 'Darth Vader' by the unions in her last post for Canada Post, she is also expected to ruthlessly cut jobs.
Ofcom's plans are likely to provoke controversy among the Royal Mail’s private rivals, TNT post and UK mail, who have been allowed access to royal mail’s network for many years.
The coalition plans to transform the royal mail into a privately owned organisation by next year.