Private-sector posties could be on the streets of London within two years. Dutch postal giant TNT says it is handling so much mail in London it could make commercial sense to have its own doorstep delivery force - clad in the firm's distinct orange livery - in the capital by 2011.

Such a move would be yet another blow to troubled Royal Mail. The opening-up of the UK postal system to competition has seen TNT handling a claimed 20% of the mail in London after winning accounts to handle big volumes of post for the likes of BT, Barclays and Sky.

TNT and other private-sector rivals such as UK Mail have until now been paying Royal Mail to use its postmen for the "final mile" doorstep delivery

But TNT says it is collecting and sorting so much post from lower-volume mailers, local councils and hospitals that the creation of its own postal delivery workforce in parts of the capital is viable.

"If the market conditions are right and the regulatory environment is right, then it increasingly makes sense," said TNT UK commercial director Charles Neilson.

TNT has just recorded a 160% rise in post handled for lower-volume business customers.

State-backed former monopoly Royal Mail would lose revenues, and it would further highlight the ability of private-sector mail groups to undercut it on price by about a sixth, typically 4p to 5p on a second-class letter. TNT has been trialling a doorstep delivery pilot scheme in Liverpool, indicating it could be ready to move quickly.

However, Neilson warned that TNT will not move until there is level playing field on tax - some large bulk mailers do not have to pay VAT on Royal Mail services. He also warned there is still uncertainty over the future of regulatory price controls as the regulator PostComm is being subsumed into Ofcom.