Economic News

LONDON (ShareCast) - Lord Mandelson's controversial plan to sell a stake in the Royal Mail has been delayed, it emerged today.

The business secretary said the bill to get the sale through, pencilled in to be heard before Parliament's summer break, will now not be heard until "later".

It was reported earlier this month that Gordon Brown hoped to win much-needed friends by postponing plans to part-privatise Royal Mail.

The government is desperate for support following recent cabinet resignations and the MPs expenses scandal. A total of 149 of the 350 Labour MPs rebelled against the plan, signing a Commons motion opposing it.

Mandelson, the project's architect, was adamant just a few weeks ago that the sale should go ahead.

In an interview with the Financial Times, Lord Mandelson said he thinks that the UK is through the worst of the recession which should give Labour's popularity a boost.

Figures released in May revealed profit doubled at Royal Mail last year, despite a drop in mail volumes, as all four of its businesses reported a full-year profit for the first time in two decades.

The company made an operating profit of £321m in the 12 months ended 31 March, up from £162m the year before.

But the pension fund deficit has more than doubled since last year to £6.8bn in accounting terms. The actuarial valuation is expected to have risen "very significantly" when it is revalued later this year.

Those big profits angered unions, furious at government plans to sell almost a third of the business to potential buyers including Dutch delivery giant TNT (Amsterdam: TPG.AS - news) and private equity firm CVC Capital.