British postal service sell-off plan may be delayed

The planned part-privatisation of Britain's Royal Mail postal service is likely to be delayed, Business Secretary Peter Mandelson said yesterday, amid strong political opposition to the scheme.

Lord Mandelson told the Financial Times that although he had planned to present legislation to parliament before its near-three month summer break from July 21, the plans are being "jostled" for space.

"I want to retain the slot, but I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled," he said.

Lord Mandelson highlighted the depressed state of the market as a reason for the delay - so far the only bidder is private equity firm CVC Capital Partners. The plan to sell off up to 30 per cent of Royal Mail is also facing strong opposition from trade unions - a vital source of funding for the ruling Labour Party - and backbench Labour lawmakers.

A total of 182 MPs have signed a parliamentary motion voicing opposition to the plans.

There were reports that Prime Minister Gordon Brown's government faced pressure to cede ground on the future of the Royal Mail as it fended off a threat to his leadership after a wave of ministerial resignations this month.

Royal Mail's 350-year-long monopoly of the postal delivery market in Britain ended in January 2006 as new rules kicked in to allow rivals to operate a slice of the market, but it still operates most postal services here.

It is also facing problems including a huge pension black hole and the rise of e-mail.