Style of letter writing.

Please explain to me whether in Continuous Writing (Composition writing esp. from Cambridge 'o' level examination point of view) block style is more correct or the style in which next paragraph begins from the next line e.g.

I will ......................................
All right.....(normal style,new paragraph starting from the very next line)

OR

I will ...............
--------------------------------------------------------------------------
All right.....(block style,leaving one line after previous text)

If you're using block style, you'll have to double space in between paragraphs. Otherwise it won't be evident where one paragraph ends and the next begins.