ROYAL Mail doubled its profits to £321m, despite a huge fall in the number of letters being posted.

The results sparked fresh controversy over the Government’s plan to part-privatise the business.

The postal giant hit its targets for delivering letters on time and all four of its businesses were in full-year profit for the first time in 20 years.

Unions and pressure groups said that the figures proved the Government’s case for a partial sale had been bust “wide open”, while the Royal Mail was urged to scrap a pay freeze for workers.

But Business Secretary Lord Mandelson said while the headline profits were in the millions, a doubling of the pensions deficit, of £6.8bn, confirmed the Royal Mail remained in a “precarious” financial position.

The average daily postbag of letters and parcels has fallen by 9m in the past three years, mainly because of emails, and the trend is expected to continue.

Mail volumes fell by 5.5% in the last financial year and are predicted to decline by a further 10% this year, with every 1% of decline costing £70m in revenue.