Royal Mail is being privatised
Royal Mail is being privatised (Reuters)

Labour MPs are to demand an explanation from Business Secretary Vince Cable over the "fire sale" of the Royal Mail once the frantic scramble to grab "cheap" shares ends at midnight on Tuesday.

Plans to demand a full Commons statement from Cable during the day were postponed amid suggestions Speaker John Bercow had warned the issue was market -sensitive and had pointed out that the minister was, in any case, appearing before a powerful committee of MPs on Wednesday.

Discussions with the Speaker are confidential but sources told IBTimes UK that Shadow Business Secretary Chuka Umunna had been pressing for a statement but finally decided the committee hearing was an effective alternative.

It will allow Labour members of the committee to cross examine Cable over the price of the shares and the takeup amid suggestions they had been sold off too cheaply.

"This is just a fire sale to line the Chancellor's pockets," a senior Labour frontbencher told IBTimes UK.

"We have already said this is a ludicrous time to sell one of the country's publicly-owned jewels - just as it is making a big profit for the first time."

He revealed the Opposition was determined to hold Cable to account.

The move comes as it emerged that only 368 of the total 150,000 Royal Mail workers had opted out of the employee shares offer. Labour believe that is because they were opted in by default.

They fear the government want to use it as a political tool to attack staff when they go on strike in protest to the sell-off.

Umunna believes the institution has been undervalued to the tune of about £1bn and that only big investors will ever benefit, making a quick profit.

Smaller, individual investors and the taxpayer will be "short changed" he said.

Cable has so far insisted the deal is good and that the £3.3bn sale price had been agreed after extensive consultations with investors.

And he has accused Labour of irresponsibly talking down the sale.

The problem for the Opposition is that it cannot promise to renationalise the industry as it may cost far more than the original sale price.