Postal giant Whistl is ending its home delivery service, threatening up to 1,800 jobs.
The Dutch owned firm suspended house deliveries last month after losing funding. It had been delivering around three million letters a week in London, Manchester and Liverpool in direct competition with Royal Mail.
The private equity arm of Lloyds bank decided not to invest, triggering a review.
Parent group PostNL said in a statement: "Following the termination of the discussions on the proposed investment in Whistl UK to fund the further rollout of its current end to end (E2E) activities, we have assessed alternative scenarios for Whistl’s E2E operations.
"Further to this assessment, it has been decided to end Whistl’s E2E operations. Whistl remains committed to further developing its successful activities in the UK, including downstream access (DSA) service, door drop media, packets & parcels and logistics.
"Whistl is in ongoing consultation with the affected employees through their union and employee representatives to minimise the impact of this decision."
The company pointed out it would continue to collect 80 million items a week to be fed into the Royal Mail system for final delivery.
Around 1,800 workers were employed on the service, wearing the distinctive orange coloured uniforms.
Many were on zero hours contracts.
Whistl is the second largest postal operator in the UK. With its highly mechanised DSA business it collects and sorts over 80 million items of mail a week, accounting for 55% of the DSA market."