The Scottish Government has delivered a blow to the Royal Mail just hours before workers prepare to walk out on strike.

A multi-million pound public contract has been awarded to private delivery firm TNT.

The Government says using the company to deliver mail for dozens of public sector groups will save the taxpayer millions.

But critics have blasted the move, with one Liberal Democrat MP describing the £8 million deal is a prime example of business "haemorrhaging" from the Royal Mail.

A Scottish Government spokesman said that two contracts covering the mail services of 89 public organisations were awarded at the end of a standard competition process.

While TNT was awarded one deal, the Royal Mail will continue to provide first class services worth £17 million.

The spokesman said: "Together these contracts will save the public purse £2.95 million annually."

But Alistair Carmichael, Liberal Democrat MP for Orkney and Shetland, raised the issue in the Commons.

He said: "Even without the impact of strike action we have the very alarming news in Scotland, that one of the major public sector contracts, the Procurement Scotland public sector contract which deals with the mail to NHS Scotland, colleges and most councils in Scotland is going to be given to a private sector operator.

However, Business Minister Pat McFadden hit back, saying: "What I want is a Royal Mail that is fit to win in that market rather than a Royal Mail that simply wishes competition to go away."

The blow comes as postal workers across the UK prepare to go on strike.

Last ditch talks are continuing to halt planned strike action over modernisation plans.

However, if a deal is not reached, members of the Communications Workers' Union will walk out on Thursday and Friday.

Royal Mail chiefs say the Government's tender announcement highlights the need for the cost cutting measures which have angered staff.

A spokesman said: "Royal Mail submitted as competitive a bid as possible for the contracts being tendered.

"We are fighting hard to retain every letter we possibly can but we operate in a commercial market in which we are facing increasingly fierce competition.

"That is why we urgently need to modernise our operations so we can compete and win business such as this."

He said the Royal Mail's ability to compete was being damaged by the threat of "unnecessary" industrial action by the CWU.

"We call on the union again to call off strike action and work with us to create a sustainable future for the business."