The Royal Mail will be given the option to increase the cost of second class postage by another penny next year.

The price of a first class stamp will go up to 28p while the cost of putting a second class letter in the post will go up to 20p on 17 April.

The UK post operator is currently losing £1m a day.

But the package of controls will allow the Royal Mail to earn an extra £750m over the next three years.

Compensation criticism

The Department for Trade and Industry has recently warned Postcomm that the Royal Mail would not be able to pay back government loans of £1bn without the price increase.

In the UK, roughly two-thirds of the 82 million items posted daily are sent second class.

Royal Mail chairman Allan Leighton said he cautiously welcomed the announcement by Postcomm but needed more time to study the detail.

The consumer group Postwatch criticised the regulators' decision to reduce the scope of a compensation scheme for customers whose mail is lost or delayed.