Major groups competing with An Post in the parcels trade make no secret that they want to expand their postal business when the EU liberalises the sector.

These include publicly-quoted companies such as Deutsche Post and TNT Post Groep, and Britain's state-owned Post Office.

All have significant resources and interests in the lucrative logistics business. They are committed to grow in the international arena.

This means An Post will be under pressure in the coming months to make a strategic alliance with a large international operator, if only to protect itself from takeover when the postal business consolidates as liberalisation continues.

One informed source said this week that Deutsche Post and TNT Post Groep were increasingly seen as the most likely partners.

Earlier this year, An Post's chief executive, Mr John Hynes, cited France's stateowned company La Poste and the British group as other possible partners.

The Irish company's formal position is that it will go it alone if no deal is reached.

Deutsche Post was floated on the international markets last Monday. In its prospectus, it said would consider expanding its mail division should opportunities arise. The company has made serious inroads into the logistics business, which accounts for a quarter of its revenues.

Worth €23.4 billion when floated, it has spent almost $5 billion on acquisitions. Its interests in the Irish market include a 25 per cent stake of the courier company DHL; 50 per cent of the security firm Securicor; and a 98.1 per cent stake of the logistics firm Danzas.

TNT Post Groep is regarded as Europe's most efficient post office group. Worth about $10.75 billion, it owns a courier company TNT Express which has operations in the Republic. In 1998, it was demerged from the telecoms group KPN, which is seeking to sell its 21 per cent stake in Eircom.

Britain's Post Office has spent £600 million sterling on acquisitions in the past two years.