Deregulation of the postal industry has brought no significant benefits to small businesses, according to an independent review of the sector commissioned by the government.

While larger companies had benefited from greater choice, lower prices and higher standards of service by using new bulk mail services, small firms were still reliant on the Royal Mail, the initial findings of the review suggest.

The review added that Royal Mail had virtually no competition in delivering letters over the final mile, direct to private and business addresses.

The Royal Mail's 350-year monopoly over delivering postal services came to an end in 2006, when other companies were given permission to collect and deliver mail.