Mr Kretinsky has agreed to make contractual undertakings to the Government to protect key public interest matters. These include maintaining Saturday deliveries for first class letters and keeping the one-price-goes-anywhere service.

The tycoon, who is known as the “Czech sphinx” in the City, has also vowed to maintain employees' current rights, protect the Royal Mail brand and keep the company's headquarters and tax base in the UK.

The board is also seeking assurances that Mr Kretinsky will maintain IDS's investment grade credit rating.

However, the announcement did not spell out a promise to keep the group's profitable parcels business, GLS, combined with its struggling letters division.

Mr Kretinsky's swoop has sparked speculation that the billionaire could look to merge GLS with Dutch operator PostNL, in which he also holds a major stake.

PostNL, which delivers parcels and letters across Belgium, the Netherlands and Luxembourg, is locked in similar debates to Royal Mail about relaxing its commitments on letter deliveries.

Analysts have said a merger could deliver “synergies” across the businesses and improve services for customers.

A source close to EP Group insisted Mr Kretinsky did not intend to break up IDS and said the list of undertakings was not exhaustive.

It is not yet clear whether the commitments would be legally binding.

Any failure to secure legally binding undertakings would raise the risk that Mr Kretinsky could renege on the pledges in future.

In 2010, US food giant Kraft, now known as Mondelez, came under fire for breaking its pledge to keep Cadbury's Somerset factory open. The promise was made during a hostile £11.6bn takeover of the chocolate brand but the factory was closed a year after the deal closed with the loss of around 1,000 jobs.

SoftBank agreed to legally-binding commitments on jobs following its takeover of British chipmaker Arm in 2016. However, these undertakings expired after five years and the Japanese conglomerate subsequently cut hundreds of roles.

Royal Mail said it will continue to hold discussions with EP Group over the scope and duration of the undertakings, which would be made to ministers as well as to the company.

Keith Williams, chairman of IDS, said Mr Kretinsky's commitments “should ensure that IDS continues to deliver the key elements of the universal service in the UK and protect the interests of the workforce at both Royal Mail and GLS.”

The two companies will now start to carry out due diligence, though bosses warned there was no certainty that a firm offer will be made.

Mr Williams said: “The board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS' current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.”

Redwheel, one of IDS's largest investors, previously supported the board's decision to reject Mr Kretinsky's initial takeover bid.

It has argued that GLS alone is worth 350p per share, meaning that under the terms of the improved bid Royal Mail would be worth just 20p per share – or £192m – not even big enough to get into the FTSE 350.

Shares in IDS surged as much as 20pc to 327p following the revised offer proposal, which came just three hours before a deadline imposed under City takeover rules.

Mr Kretinsky, who is also an investor in West Ham Football Club and Sainsbury's, is already the largest shareholder in IDS with a stake of more than 27pc.

His swoop has proven controversial given the sensitive nature of the postal service.

Sir Vince Cable, who oversaw the privatisation of Royal Mail in 2013, has called on ministers to carry out a fit and proper person test on Mr Kretinsky.

The Czech sphinx was previously subject to a national security investigation when he increased his stake in the company above 25pc in 2022, though this was ultimately approved.

A government spokesman said: “We recognise the importance of the Royal Mail to the British public, and we are monitoring these developments very closely.

“Our priority is to ensure that Royal Mail customers get the service they deserve, including six days-a-week deliveries and a guaranteed standardised price for post throughout the UK, as enshrined by the universal service obligations, regardless of the owner.

“We will engage with the bidder at an appropriate time to explain our expectations for the future of Royal Mail.”

In a letter to Mr Kretinsky on Wednesday, Jonathan Reynolds, the shadow business secretary, asked the tycoon to confirm that Royal Mail would remain headquartered and tax resident in the UK, as well as calling for guarantees around postal workers' rights.

He wrote: “Whilst it's important that Britain remains open and attractive to foreign investment, Royal Mail is an iconic British institution with a unique place in our society and infrastructure.

“Royal Mail is as British as it gets, and Labour will take the necessary steps to safeguard its undeniable identity and place in public life.”

The Czech tycoon is also facing opposition from the Communication Workers Union (CWU), which represents around 115,000 postal workers.

In a statement on Wednesday, Dave Ward, the CWU general secretary said: “It cannot be right that a key part of national infrastructure is allowed to be owned by individuals or companies who have no vision for the future and no clear plan to put the workforce at the heart of turning Royal Mail around.”

Mr Ward accused the company's board of trying to “run letter deliveries into the ground and become just another glorified parcels company.”

EP Group's revised offer consists of 360p per share in cash, plus a final dividend of 2p expected to be paid in September and a special dividend of 8p which would be paid on completion of the deal.

EP Group declined to comment.