State-owned Royal Mail Group said on Tuesday it would create 1,000 new UK jobs as part of a 75 million pound investment in its Parcelforce business.

The postal operator - set for a sale or flotation in early 2014 - aims to offset a steadily declining letters business by growing in a UK express parcels market worth 5.8 billion pounds which thrives on increasing online retail sales.

Royal Mail's parcels businesses contributed 4.2 billion pounds of revenue in the fiscal year to March 25 - almost half of group revenue - helped by retail growth and sales at its European parcels arm GLS.

It said the jobs at its Parcelforce arm would be spread countrywide over four years, with the firm also building a processing centre in 2013 as well as new and revamped depots.

In June, Royal Mail more than quadrupled its annual earnings, with its core letters and parcels business posting a first profit in four years thanks to cost cuts and price hikes.

Parcelforce, whose customers include BT, Amazon and John Lewis, currently has around 4,500 employees.

(Reporting by Neil Maidment; editing by Stephen Nisbet)