Threat to Saturday post deliveries

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The proposal is included in a review of the industry by watchdog Postcomm.

A Royal Mail spokesman said: "Royal Mail is very strongly opposed to any move to reduce our service quality and is dismayed that Postcomm is considering adverse changes including cutting deliveries on Saturday and reducing our First Class quality of service targets."

The Post Office has already stopped twice-daily deliveries in a bid to boost the business.

This week Royal Mail announced a drop in profits and said it had lost £100 million in the last financial year through fulfilling its universal service obligations - its promise to deliver letters to every address in the country for the same price.

The Postcomm review also advises Royal Mail to lower its delivery targets.

At the moment, 93% of first class mail has to be delivered the next day.

Although the Royal Mail has hit that target for the past two years, Postcomm has queried whether it should be so high.

Later, Postcomm denied claims that it would advise Royal Mail to end deliveries on Saturdays. A spokesman said: "There is no truth in the suggestion we are going to recommend a reduction in service from six to five days. The status quo is totally enshrined in law."

The group will submit evidence to a review looking at the future of the postal industry. All submissions to that review are due by May 19.