Page last updated at 16:21 GMT, Sunday, 8 March 2009

'No alternative' to mail sell-off

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Lord Mandelson: 'This is a much better deal... than anything any alternative government would offer'

The plan to part-privatise Royal Mail is the "last throw of the dice" to secure the future of the postal service, Lord Mandelson has said.

Speaking to the BBC's Andrew Marr Show, the business secretary said it was the only way "to find an acceptable, consensual way forward" for Royal Mail.

Under the government's bill, which will be debated in the Lords on Tuesday, the government aims to sell a 30% stake.

The plan is strongly opposed by mail unions and many Labour MPs.

'Very serious'

The government insists that part-privatisation - and the private investment this will bring - is essential for Royal Mail.

This is about transforming a business which is desperate need of change and modernisation
Lord Mandelson

It says Royal Mail is losing business, desperately needs to become more cost-effective, and is further hampered by a 6bn pension deficit.

The mail unions fear that the part-privatisation move will lead to job losses, and its eventual full sell-off.

"The situation at Royal Mail is very serious, the finances have to be turned around," said Lord Mandelson.

"I can't just walk away, put it in the bottom drawer, and say this is something for someone else to sort out.

"This is about transforming a business which is desperate need of change and modernisation."

Dutch postal operator TNT has already said it is in the running to buy the 30% stake in Royal Mail, but Lord Mandelson said other European firms were "showing an interest".

He reiterated that the government would always maintain its majority stake.

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