Postcomm, which is due to announce the penalties shortly, may also impose further fines from 2003-2004 for what are considered as escalating levels of failure.
The whopping fine will be paid out to business and retail customers following the introduction of the compensation scheme last year. Royal Mail was fined £7.5m last year for failing to meet service targets.
Royal Mail has already paid out around £16m in compensation to retailers since October, when the compensation scheme began.
According to the Financial Times, Royal Mail can argue that special circumstances need to be taken into account for the poor service, such as a fire last year at its Northampton mail centre.
Separately, it was revealed today that last post could be brought forward to 9am in some rural areas as part of a Royal Mail efficiency drive.
Critics claim the move could cripple small businesses that operate from rural barns and cottages. Tory MP Anthony Steen has urged Royal Mail chief executive Adam Crozier to abandon the plans, because it would leave rural areas with a "third-class" postal service.
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