An Post lobbied the Government this year to remove the financial independence of a new Commission that will replace the Office of the Director of Telecommunications Regulation shortly.

The firm asked in February for changes to be made to the draft Communications Bill to bring control of the regulator's budget into line with "some form of Government control", according to douments seen by The Irish Times.

An Post, which is taking a legal challenge against the current regulator's plan to charge it a levy of €2.5 million to cover the cost of regulating the sector, proposed that the Ministers for Finance and Communications should approve the commission's annual budget before it can levy firms for cash.

Currently, the telecoms regulator raises money from telecoms operators and An Post by means of a levy which covers the cost of regulating the sector.

But under the scheme suggested by An Post the new Commission's freedom to raise funds and meeting expenses would be placed more fully under the authority of the Government.

In its annual report last week, it emerged that the current regulator recorded a €10 million surplus on its €25.3 million net income last year. This surplus was paid over to the Exchequer. in 2000, the surplus was €30.4 million..

A letter from An Post's chief legal representative to the Department of Public Enterprise states: "This opportunity should be taken to address the issues raised in the legal proceedings and to bring the arrangements regarding the control of the regulator's budget into line with the practice in other EU member-states, where regulator's budget is subject to some form of Government contol,"

An Post also recommended that the Minister for Finance should pay the Commission all expenses incurred by it in respect of litigation and all expenses in respect of contributions or other membership charges payable to international postal organisations.

But under the the terms of the Communications Act 2002, the Commission will continue to have the power to set a levy telecommunications operators and postal services. This levy can be used to enable the Minister to pay for membership charges to international organisations, says the Act.

A spokesman for An Post said the company had made the submissions to the Department during the preparation of the Bill.

He said An Post believed the current levy of €2-2.5 million was excessive.