The UK government has sold half of its total 30% stake in Royal Mail for a 51.5% premium to its initial public offering price of 330p per share.

The sell-off, worth a total of £750m, led company's share price down 3.86% 496.57p and made it the biggest FTSE 100's faller in mid-morning trade.

Business secretary Sajid Javid said the price was good value for the taxpayer and the money will be used to help reduce the government's deficit.

The statement added that the government does not see any policy reasons for it to hold on to its remaining 15% stake in Royal Mail much longer.

"Royal Mail has demonstrated that it can thrive in the private sector. It now has the ability to access the funds it needs to ensure it has a sustainable future and can adapt to the changes in the postal market," said Javid.

Critics blamed former business secretary Vince Cable for selling Royal Mail as a huge discount when it was floated in October 2013.

Chancellor George Osborne announced plans to sell off the Government's stake in the Royal Mail -- as well as part state-owned lender RBS -- at his annual Mansion House speech.

"We want to help the Royal Mail attract more investment and serve its customers, and use the money we raise in return to pay down the national debt.

"And we're also going to make sure that there is a special bonus for the workforce who have done such a great job turning Royal Mail around. Thanks to them, Royal Mail's share price has risen. so we're going to give more of the shares to the staff."