The Royal Mail yesterday won a Government-backed package worth £3 billion to modernise the network and tackle its huge pension fund deficit.
Delighted executives described the deal as "fantastic" and made it clear they will now press ahead with controversial plans to issue shares to postal workers despite opposition from the industry's main trade union.
Competitors to Royal Mail were less pleased and one threatened to refer the deal to the Competition Commission.
Royal Mail chairman Allan Leighton insisted the money was not a government "bail out", or state aid.
He said it would free up millions of pounds of the Royal Mail's reserves as well as giving it the chance to borrow £900 million.
The Government will also fund the continuing restruc-turing of the Post Office, it was announced.
Mr Leighton said a consultation exercise among staff held by the Royal Mail had so far received 80,000 responses in favour of the shares plan, with just three against.
Details could be announced within weeks, with workers being given the chance to own £5,000 worth of shares.
Dave Ward, Deputy General Secretary of the Communication Workers Union, said talk of shares was a "stage-managed distraction", adding: "Our members are concerned about basic pay, pensions and job security, and are not interested in selling out their industry for a phoney one-off payment."
The Royal Mail increased its profits by 17.5 per cent last year, triggering bonus payments of more than £400 for postal workers across the country, it was announced.
Operating profits in the last financial year, calculated under new accountancy standards, were £355 million, with all of the Royal Mail's businesses improving their financial performance.
The Royal Mail said the "outstanding" financial result meant that its 180,000 work-ers will each receive a bonus of £418, amounting to a payment of almost £100 million.
Adam Crozier, Royal Mail's chief executive, said one of the main challenges now was tackling the pension fund deficit, which grew last year from £4.5 billion to £5.6 billion.