The investigation will look into the government’s plans to relieve the postal operator of its £8bn pension deficit and to restructure its £1.7bn debt.

The government is hoping to sell the publicly owned company by March next year, but needs to strengthen its balance sheet before finding a buyer.

The government has argued that its plans are in line with the EU guidelines on state aid for rescuing and restructuring firms in difficulty and that Royal Mail’s pension liabilities stem from when it was a public sector monopoly, prior to 2006.

However, the Commission said that the UK government had not convincingly demonstrated that the restructuring plan would comply with state aid guidelines or that its plans to relieve the pension deficit would not provide Royal Mail with unfair advantages and distort competition in the postal market.

Joaquín Almunia, Commission vice president in charge of competition policy, said: "The Commission acknowledges the importance of the reform of the postal market in the UK. However, we must ensure that the state measures do not provide undue advantages to Royal Mail as this would distort the conditions of competition among postal operators in the internal market."

A Royal Mail spokesperson said: "This is a matter for our shareholder, the government.  The EU state aid process is a negotiation between the member state and the EU Commission."