The postal regulator has approved plans by Royal Mail to base the price of sending letters and parcels on size and shape as well as weight. 

Under the new system, which has been hailed as the greatest change in postal pricing since the introduction of the penny black, charges will be higher for light but large items and lower for some heavier and small items.

The changes, to be introduced in September 2006, are expected to affect prices on around 30% of business post and 20% of consumer post. Around half will cost more to send, while the other half will cost less.

Businesses posting catalogues, books and magazines, for example, will see price reductions as these items will be cheaper to post.

The first-class price of a large letter weighing 750g and less than 25mm thick will drop from £2.71 to £1.23 but a large greetings card weighing less than 60 grams, which currently needs a 30p stamp to send first class, will cost 42p.

Royal Mail says the changes, approved by industry regulator Postcomm, more accurately reflect its costs. It claims lightweight but large and bulky post currently costs more to transport, sort and deliver than regular size mail.

Lorna Clarkson, from Royal Mail, said: "We need to be able to set our prices to cover our costs and to generate revenue to invest in our company and our people.

"A fair and flexible pricing system is key to Royal Mail being able to maintain the services on which we all depend as customers."

From January, Royal Mail's 350-year monopoly over letter delivery ends, opening up the market for independent operators.