Telecoms regulator Ms Etain Doyle has sought comments on a proposal to increase the price of a basic stamp to 41 cents from 38 cents. An Post wants a rise to 45 cents, but that will not be considered until it submits separated accounts to the regulator in May.

In a consultation paper published yesterday, Ms Doyle said an interim rise would be granted from April 1st. The mooted 7.9 per cent rise to 41 cents covers letters weighing up to 25 grammes. Stamps for letters weighing 25 to 50 grammes will fall to 41 cents from 44 cents.

Ms Doyle said the structure of postal tariffs would change, with the size of envelope rather than weight dictating prices. "Customers who send mail in bulk need to be accommodated better in terms of access conditions and price," she said.

An Post, which has projected losses of up to €30 million (£23.6 million) this year, said the interim increase was "urgently needed". But the rise suggested was "not adequate" to help the firm reverse its difficulties.

Relations between the State firm and its regulator are strained. An Post has challenged in the High Court a €2.5 million regulatory charge imposed last year by Ms Doyle. She said: "An Post are facing significant operating deficit on the postal services and, although it has a significant cash surplus, it must achieve substantial operating efficiencies to face full competition in the future. It is clear to me . . . they will have to make substantial changes in the way they price their services."