Royal Mail privatisation plan suspended

The move to sell part of Royal Mail was already deeply unpopular with the Labour backbenchers has finally been suspended despite earlier claims by the government that the national postal service will definitely be part privatised.

"Market conditions have made it impossible to conclude the process to identify a partner on terms that would give value for money to the taxpayer," Mandelson told the House of Lords, Britain's upper house of parliament. "When market conditions change...we will return to the issue."

The government had proposed selling a stake in Royal Mail as part of a package of measures aimed at making the company more efficient. Royal Mail has a reported pension deficit of £8billion and the government argued that private intervention is required to help Royal Mail.

However, Mandelson said that when the market conditions change the government will return to the issue.

The Union representing the postal workers has strongly opposed the move to privatise the Royal Mail.