ON the face of it Royal Mail's demand to put up the price of a first class stamp to 47p is an outrage.

This is a company making £2 million a day, whose directors have awarded themselves massive bonuses (you may have read that bit before).

But on closer inspection maybe the postal service does have a problem. Royal Mail is set to lose some of its biggest and most lucrative customers with a string of government departments, high street banks and insurers preparing to defect to rival postal operators.

The Department for Work and Pensions (DWP), the Inland Revenue and several large banks are understood to be close to switching from Royal Mail to one of the new breed of competitors which have moved in after the liberalisation of the £5.8 billion postal market.

Losing the DWP, in particular, would be a serious blow for Royal Mail as it is the biggest postal user of any Whitehall department. It has already removed about £400 million of business a year from Royal Mail by paying state benefits direct into bank accounts rather than through the Post Office branch network.

The trouble is that these rivals aren't interested in getting a Christmas card from Bentham to Buckden. They want big volume. They want it fast, easy and highly profitable. Which leaves a problem for Mrs Cannybody in Bentham.

Our first class post is, it seems, despite all our grumbling, relatively cheap. A stamp costs 51p in Germany, 48p in France.

One thing is for sure - if you don't get that traditional Christmas card from a long lost friend or relative this year, you'll know why.