Britain's second largest postal firm TNT Post is to trial postmen on the streets of west London next month as it steps up ambitions to eventually rival state-owned Royal Mail Group as the UK's postal provider.

TNT Post UK, which is owned by Dutch mail company PostNL NV and handles more than 300 million items a month in the UK, will run test deliveries to homes and businesses in the capital from mid-April after a successful tryout in Liverpool.

The firm currently collects and sorts post before handing it over to Royal Mail to deliver what is known as the 'final mile' to residential addresses and businesses.

TNT Post UK wants to deliver this service itself but before its orange and black clad postal workers hit the streets permanently it is fighting to get a Royal Mail VAT exemption on the final mile removed first. Any other company wanting to offer a delivery service are subject to VAT.

We want to make a significant investment in infrastructure and create thousands of jobs in the UK but the government is doing little to help us to do this, TNT Post UK Chief Executive Nick Wells said in a statement on Thursday.

Postal regulator Ofcom has said that it will assess on a case-by-case basis any interest in providing so-called 'end-to-end competition' in the UK, where a postal operator receives the letters and delivers to an address without using Royal Mail's network.

TNT Post UK, which processes around 17 percent of mail in Britain, also said on Thursday that it had signed an agreement with Tesco to handle up to 180 million items a year for the world's third-biggest retailer. A value for the deal was not given.

On Wednesday Britain's plans to privatise Royal Mail moved a step closer after EU regulators approved government plans to free the company of its deficit-ridden pension scheme.

(Editing by Matt Scuffham)