Mr McGovern said he was not "fully supportive" of the proposals
Labour MP Jim McGovern has resigned from the government in protest at plans to part-privatise Royal Mail.
Mr McGovern, MP for Dundee West, had been parliamentary private secretary to business minister Pat McFadden, whose department is overseeing the changes.
He said it "beggars belief" that Dutch company TNT could be brought in to advise Royal Mail on its operations.
Business Secretary Lord Mandelson, who announced the plans, insists Royal Mail will remain "publicly owned".
Mr McGovern, an MP since 2005, is a former glazier and and activist for the GMB trade union.
In a statement, he said he had enjoyed being PPS but felt he had "no alternative" but to resign.
He said: "I believe a PPS has to be fully supportive of proposals of the department which they serve.
"In this case I do not support what looks to me like partial privatisation of the Royal Mail."
A number of backbench Labour MPs have attacked the government's move to inject private capital into the Royal Mail and have pledged to fight the plan.
Mr McGovern added in his statement that "it simply beggars belief that we would employ the services of a company from abroad to tell the Royal Mail in this country where they are going wrong".
But later he told BBC Radio 4's PM programme he was more concerned about the fact it was a private company, than that it was from abroad.
"In my experience when the private sector gets involved in the public sector, it inevitably leads to an erosion of the terms and conditions for the employees."
He added: "My understanding of the Labour Party and government manifesto ... is that there was a commitment there to maintaining public ownership of the Royal Mail contradicts that.
"In all conscience yesterday, the statement that was made, I could not support."
But former postal minister Ian McCartney denied there were plans to privatise the Royal Mail.
He told the programme: "It's going to be in public hands and will remain in public hands. This is a partnership not a privatisation."
He said it would guarantee Royal Mail a "total future in the public sector", give pension protection for current and future pensioners, guarantee investment in new technology and improve relations between employers and staff.
On Tuesday, the government responded to The Hooper report into the Royal Mail, which describes it as "untenable" in its current state.
It recommends the organisation should enter into a strategic partnership with one or more private sector partners.
It also says the "pressure that the pension deficit exerts on the Royal Mail must be eased".
The deficit was £3.4bn in 2006, but is widely thought to have doubled since then.
Lord Mandelson said the government agreed with the recommendation it should take over much of the responsibility for cutting this.
The Conservatives welcomed the recommended part-privatisation of the Royal Mail, calling it a "step in the right direction".
However, shadow business secretary Alan Duncan accused ministers of "raiding" the pension fund to "bail out government borrowing".