The government is set to back Consignia in a bitter pricing row between the postal operator and its watchdog.

Postcomm and Consignia have clashed over pricing controls which the company believes risk the future of the postal service.

The company predicts a £460 million revenue loss under the regulator's proposed pricing formula.

Trade and industry secretary, Patricia Hewitt, is standing above the fray but behind the neutral stance ministers are said to be prepared to fight Consignia's corner, reports the FT.