The price of a first class stamp could rise to as much as 40p if plans to introduce competition to the postal service go ahead, says Consignia.

Fierce competition to secure contracts for bulk business mail could hit Consignia's profits and its ability to deliver personal mail across the country at fixed prices, the company said.

As well as the possible increase in the price of first class stamps from 27p, second-class stamps could rise by as much as 11p, soaring from 19p to 30p.

Consignia's concerns were raised after postal regulator Postcomm announced plans to allow competition in the bulk mail market - one of Consignia's most profitable areas which effectively subsidises its personal mail service.

A Consignia spokeswoman said: "What we're saying is that if Postcomm allow cherry picking of our most profitable business we will not be able to deliver to everywhere in the country for the same price."

Postcomm told Consignia, formerly the Post Office, that competition could be introduced from April 1 into the bulk mail market.

Last month Consignia chairman Allan Leighton said the company was losing £1 million a day and faced "death by a thousand cuts" under the plans for competition.

It was already costing 28p to deliver each first-class 27p letter.

Postcomm said the best way to improve services and contain costs was for the company to face "real competition."

Consignia's claims come as the Communication Workers Union threatens a strike of its 145,000 Royal Mail workers next month over pay.