One hundred years ago, the hub of the Post Office's operations processed every letter by hand. Today hardly any letters - business or social - are ever touched by a postman at any stage of the sorting operation. It is an incredible transformation that has embraced the very latest technology and turned the site just south of King's Cross station into Europe's largest sorting office.

Pride of place among the Post Office's new technologies must go to the Electronic Post Box, which allows companies of all shapes and sizes to skip the tedious process of writing letters, addressing envelopes (not forgetting the oceans of lick required to seal them), stamping them and then staggering with the tottering pile to the nearest letter box to send them on their way.

Now companies can send corporate letters and address lists to the post office on disk or by e-mail, at which point they are laser printed, put by machine into bar-coded envelopes and dropped into the latter stages of sorting. If companies make their request by 6pm, delivery to anywhere in the UK can be guaranteed for the next day.

''More than three-quarters of all business letters or messages start life on a computer now and it makes sound commercial sense for companies to send such letters direct to the Royal Mail in electronic form rather than print them off and post them themselves,'' said a post office spokesman.

Of course, companies will not want to repeat information like standard forms of address, signatures and logos every time they communicate with the post office, so a template containing all such essential information, designed and agreed with the customer, is stored for future use.

It is the only service able to transfer computer-generated mail directly into the physical distribution network and, given its popularity it is hardly surprising that it is growing rapidly. Two new centres have recently been opened, representing an investment of six million pounds and an increase in capacity to 100 million items a year.

These centres - in London and Chesterfield, central England, - are equipped with state-of-the-art continuous sheet printers, capable of printing up to 13,500 impressions an hour, and envelopers running at up to 12,000 an hour.

The service has been a boon for hard-pressed businesses and organisations which can now spend more time on core activities. Among the Post Office's satisfied electronic service customers are such prestigious names as the British Red Cross, the Blood Transfusion Service, Ogilvy and Mather, Microsoft, Cornhill Insurance and the Royal Bank of Scotland.

Another vital part of the Post Office's surge forward into the brave new world of technology is its determination to ease the flow of direct mail. Last year it handled a staggering 3.275 billion items, with a value of more than 1.5 billion pounds - 30 per cent up on the previous year. This phenomenal increase is testimony to the fact that this mode of distribution is increasingly favoured by advertisers, making it the third most popular method after television and the press. And investment in improved technologies have made it all possible.

''Direct mail is now our bread and butter. It delivers economies of scale on which universal delivery depends,'' said a spokesman. The amount of direct mail has increased 126 per cent in the past 10 years, generating more than 16 billion pounds worth of business. But technology has speeded up the processing of ordinary letters too. Correspondence coming into post offices is given the "magic eye" reading postcodes and converting them into the faint barcode that's visible in the bottom right-hand corner of most envelopes.

Letter sorting machines then read 30,000 barcodes an hour for a final sort which has letters shooting along a production line and into the area bins, from where they are distributed by road, rail and plane around the country and beyond.

Despite state-of-the-art machinery, bad handwriting cannot be legislated against. So those codes that machinery cannot decipher are punched in by hand. Then there are those envelopes whose complete address is illegible and here there's nothing else to do than return to labour-intensive sorting by the ``Blind Unit'' who rely on reference books, personal knowledge and intuition for letters to find their destination.

Predictions were rife that the electronic revolution would be the death knell of conventional post. But the reverse has been the case, though it has to be said that the Post Office has been astute in exploiting niches in the market. Mail volume increased last year 3.5 per cent over the previous year and has now reached an all-time high, generating more than 17 million pounds revenue. And a spokesman anticipated a further increase of 20 per cent over the next five years.

A mobile phone account generates 14 items of mail a year,'' says Richard Dykes, the Royal Mail managing director. And although e-mails are growing in popularity at a fast rate, their most common form of message is to say that there is something in the post.

In 1988, there were some 50 million letters a day, today there are 72 million - and the increase has been in business communications (up 5.7 per cent), while social mail has steadied. The technology that might have destroyed the post office has been harnessed to ensure its future.

The level of that investment shows how much store the Post Office is placing in the future: six million pounds sterling on Electronic Post Box, 130 million pounds sterling on terminals for Post Office benefit payments, 150 million pounds sterling on Railnet (the super-automated underground sorting depot in Willesden, London, though which a fifth of all letters posted in Britain pass), and 193 million pounds sterling on Integrated Mail Processors (IMP) rolls the code reading process and sorting machinery into one operation, which is soon to be installed in 72 mail centres. In addition, it will contain software to let the Post Office into the database marketing end of direct mail.

For more information, contact:

The Post Office
148 Old Street, London, United Kingdom, EC1V 9HQ
Telephone: +44 171 250 2468
Fax: +44 171 250 2244