Suggestions that the government plans to sell off the Royal Mail have been strenuously denied.
Rival firms will be able to bid to deliver letters from 2007
The Department for Trade and Industry said ministers were not planning to
privatise any element of the business.
A spokeswoman said: "We have no plans to privatise the Post Office - no plans to privatise any element of it."
The statement follows a Mail on Sunday report that Royal Mail chairman Allan Leighton has been given permission to privatise a large part of the business.
It had been claimed that Mr Leighton tried to persuade ministers it would be the only way to ensure the company's survival beyond 2007 when rival firms will be able to bid for contracts to deliver letters and parcels anywhere in Britain.
The Mail on Sunday said 20% of the Royal Mail would be handed to its own
workers and 31% sold on the market, raising around £4 billion.
The chairman of the House of Commons' trade and industry select committee,
Martin O'Neill, said he had received assurances from ministers just days ago
that the Royal Mail was not for sale.
"I was assured just 10 days ago that this was not on the government's
agenda," he told the Mail on Sunday.
"This will not find favour with the workforce because the record of
partially-privatised companies on job security and working conditions speaks for
Any move to sell off the Royal Mail would, in all likelihood, prompt anger among trade unions.
Billy Hayes, general secretary of the Communication Workers' Union, said Mr
Leighton should abandon any ideas of privatisation.
The Royal Mail also insisted it was not being sold off.
Head of press relations David Simpson said: "As far as we are concerned this
is not the case.
"It is not the Royal Mail's prerogative to do anything at all like this, it
is a matter for the government.
"And it is our understanding that this is not on the government's agenda."