Banks estimated the value of Royal Mail at up to £8.6 billion when approached months ahead of the eventual sale for £3.3 billion.

Business Minister Michael Fallon revealed the higher and lower estimates of 21 different banks, on an anonymous basis, in answers to written Parliamentary questions.

One bank estimated the value could be as low as £2.8 billion.

Mr Fallon cautioned the figures had only ever been estimates based on information in the public domain.

He said: "As the banks who appeared at the select committee on business, innovation and skills on November 20, 2013, stressed in their evidence, their valuations were primarily desk top valuations based on limited publicly available information and widely varying assumptions.

"These were, therefore, very much illustrative valuations which the banks produced several months before the IPO (initial public offering) was implemented against a completely different backdrop.

"They therefore did not accurately reflect the specific circumstances and market that prevailed immediately prior to the IPO when pricing decisions were being taken."

On average, the banks estimated a lower value of £3.9 billion and an upper value of £4.8 billion.

In his answers, to Labour MP Jim Cunningham (Coventry South), Mr Fallon said consultants Lazard were paid a fee of £1.5 million for advising on the IPO.

Ministers have faced repeated claims they under valued Royal Mail when they sold off 60% of the company last year only to see the share price soar.

Royal Mail shares opened today at 604.5p. They were initially sold at 330p.