ROYAL Mail has signed a groundbreaking deal to deliver letters collected by one of its competitors.

The agreement, with UK Mail, ends months of talks about how much the organisation can charge its rivals to carry their mail over the so-called "final mile".

The terms of the agreement were not disclosed, but the deal is expected to be followed by similar arrangements with other companies.

Adam Crozier, Royal Mail chief executive, said: "I am confident we have the basis to proceed to an agreement that will work for Royal Mail and our postmen and women, as well as for UK Mail and business customers who will benefit from enhanced choice."

Peter Carr, chairman of postal watchdog Postwatch, said: "It is good news that UK Mail and Royal Mail have reached an outline agreement. We hope that this will result in a full agreement by the end of January."