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Royal Mail privatisation binned

Source ITN

Updated on 01 July 2009

The controversial part-privatisation of the Royal Mail has been shelved because of the recession.

Business Secretary Lord Mandelson said finding a buyer who could give value for money for the taxpayer would be "impossible" in the current climate.

He added there would be "no prospect" of the sale going ahead but "we will return to the issue when market conditions change".

Many Labour MPs and Royal Mail staff opposed the sell-off.

Ministers say private sector money needs to be brought in to help rescue the Royal Mail as it faces a pension deficit estimated at up to £8bn.

CWU general secretary Billy Hayes said: "The Government has not only looked at market forces but has listened to the British public.

"Privatisation was a deeply unpopular suggestion from day one.

"We now look forward to resolving issues which remain around pensions, regulation and modernisation.

"The CWU is as committed as anyone to improving industrial relations in Royal Mail.

"Now that this uncertainty has been lifted, there is a great opportunity to step up a gear in modernising Royal Mail in the public sector."

Prime Minister Gordon Brown said: "Peter Mandelson made this decision. We looked around the marketplace and there are not any buyers or the investors that we would want to see."

© Independent Television News Limited 2009. All rights reserved.

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