We have come to the conclusion that rural services are profitable, just like city services

Martin Stanley Postcomm chief executive

"So, we have to make sure that proper funding is in place for funding for that in the future."

Consignia, which runs the Royal Mail, and the Communication Workers Union are also strongly opposed to the move.

Consignia still has a virtual monopoly on the collection and delivery of small items of mail.

It described the plans as "death by a thousand cuts" and revealed that it was already losing �1m a day on letter delivery.

'Juicy bits'

He said that promises of safeguards from Postcomm were too vague and added the government must take action to prevent the collapse of the Post Office.

Speaking on BBC Radio's Good Morning Scotland programme, Mr Thurso said: "What these proposals do is basically privatise and sell off and dispose of all the juicy bits to the competitors, leaving the Post Office unable to fund the universal service.

"It is particularly difficult for us here in Scotland, where there are rural areas in which clearly there is not going to be a profit in that service."

Rural post offices are said to be at risk

Mr Thurso said that while he accepted that it was good to have competition where good competition could exist, the example of Railtrack illustrated how the project could go wrong.

"Otherwise we will end up with another Railtrack situation with the Post Office in 10 or 12 years time."

However, Postcomm chief executive Martin Stanley said it was determined to deliver the best possible service to customers.

Mr Stanley said: "We are not tying their hands behind their backs. We spent a lot of time and effort looking into the issue of a universal service.

"We have come to the conclusion that rural services are profitable, just like city services.

More choice

"The reason being, it can be just as expensive delivering in city centre streets than in suburban areas or even rural areas."

Mr Stanley said that the project was not like Railtrack, but rather more similar to BT.

Customers would have more choice because of increased competition in the markets, he said.

"The service has been the same for over 150 years and we feel it is really time that the customers had a lot more choice."