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The government has rejected calls from MPs for a precise figure on the costs of modernisation of the Royal Mail.
The business select committee voiced concerns about the government's plans to part-privatise the postal service, arguing that a strong business case had not been made to back up reform.
But postal service minister Pat McFadden told the committee that modernisation was not a "one-off event" that would simply require "the purchase of some new machines".
With the Postal Services Bill is due to be debated in the Lords, McFadden said that Royal Mail faced a "stark choice" about its future prospects.
"The measures the government proposes can deliver our objectives, which are to put a publicly-owned Royal Mail on a clear path to modernisation and, in so doing, to secure the future of the universal postal service," he said.
"Royal Mail faces a stark choice about its future, to modernise or decline as mail volumes drop because of the shift to email and text messaging.
"The government has put forward proposals that offer Royal Mail the opportunity to survive in this new communications age, as well as respond to its customers' changing needs."
Modernisation would be an "ongoing process" in a "fast-changing" environment, McFadden argued.
This means that the cost of modernisation will depend on the business plan agreed with a private partner, as well as the speed of implementation, the postal services minister said.
"Given Royal Mail's falling revenues and limited profits over the next few years, and pensions fund deficit, clearly Royal Mail will not be able to fund this investment alone," he stated.
"Additional capital will be required and this could be hundreds of millions of pounds, in addition to the funding we have already provided.
"As well as capital, there is a need to transform Royal Mail in order to preserve the universal service which is at the heart of our postal system."
The Postal Services Bill will receive its third and final reading on May 20 in the Lords.
Dods Parliamentary Communications Ltd