An Post failed yesterday to present plans to its regulator, Ms Etain Doyle, to increase next-day delivery rates. The State company, which was granted an interim three-cent rise in the cost of a stamp last week, has argued that the new targets are unattainable and unnecessary.

It has been given a four-week extension by Ms Doyle, who set yesterday's deadline for proposals to improve efficiency last September. Ms Doyle, who also regulates the telecoms industry, has monitored the postal business since last year.

The new deadline in the middle of May will come two weeks before the company will be required to submit separated accounts to the regulator for the first time. Such accounts will determine Ms Doyle's determination of definitive postal prices.

The company wanted a seven-cent increase in domestic tariffs and a 30 per cent rise in international tariffs to offset significant losses.

With a €30 million deficit for 2002 and its application for a rise in the price of international stamps first made last April, relations between the company and Ms Doyle's office are strained. The company is challenging in the High Court a €2.5 million regulatory charge imposed by Ms Doyle last year.

Demanding a national 92 per cent next-day delivery rate this year and 94 per cent rate for local deliveries, the regulator also wants an increase to 97 per cent from next January for a new category of first-class mail.

An Post missed its own 90 per cent target early last year, but the next-day rate improved to 92 per cent in later months, excluding the Christmas period. The company says the 94 per cent target is "going to cause problems" and has argued the 97 per cent limit is unrealistic and unattainable.

Asked about yesterday's deadline for proposals to develop a first-class service with a 97 per cent next-day delivery rate, a spokesman said: "We are obviously working on that at the moment. We have sought an extension for four weeks and we are now working on that basis."

It is thought the company will argue that the 97 per cent target can be met in certain areas of the State, but that it cannot meet such a target for all county-to-county deliveries.

The company says customers were satisfied with a 90 per cent next-day delivery rate and a 98 per cent rate over two days. Ms Doyle has disagreed, stating that "much improved" delivery rates were required.

To meet the 97 per cent next-day target, she said "new options" were required. These included the choice between a first-class service and those offering cheaper options which do not involve sorting during the evening peak.

A customer survey Ms Doyle commissioned a year ago found 73 per cent of respondents said "all businesses" should have a choice between a first-class postal service - with next-day delivery - and a cheaper second-class for delivery within three days. Among large post users within the group of 300 surveyed, one in five said they were dissatisfied with the next-day delivery rate.