Postal services regulator Postcomm may be prepared to water down plans to extend competition into the bulk mail market.

Consignia has warned that if the plans go ahead as they currently stand, losses at the troubled company could spiral out of control.

The company's deficit is already thought to have grown from £1 million a day to £1.5 million after the worst January on record.

Meanwhile, two Consignia directors have decided not to accept recommended pay rises of 10 per cent.

Postcomm chairman Graham Corbett said: "I don't think we are going to stand absolutely rigid...if we are presented with good reasons for changing our minds."