Major Shake-Up For Royal Mail

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Dutch postal giant TNT has expressed an interest in investing in the Royal Mail, Business Secretary Lord Mandelson has revealed.

He announced the firm's interest as he signalled his support for part-privatisation of the loss-making business.

The move is one of the main recommendations of the Hooper report on the Royal Mail's future.

Richard Hooper, formerly of media watchdog Ofcom, has suggested a radical shake-up of the organsisation.

Lord Mandelson was speaking after reports it could be sold to a foreign postal company - putting 50,000 jobs at risk.

In a deal worth around £3bn, at least a third of the state-owned firm would be bought by a private company, it was claimed.

Half of the postal service's 71 mail centres could be closed and the business broken up and offered to its rivals.

Collection and sorting could be divided and stakes offered to other operators.

The "last mile" delivery is likely to stay with the Royal Mail.

The Hooper report warns the Royal Mail's pensions deficit, which was £3.4bn in 2006, is likely to have doubled when a new valuation is made next year.

It includes calls for a speeding up of modernisation to maintain a "universal service", which include post being delivered six days a week.

The Conservatives have claimed the Government is planning to "seize" the £22bn in the Post Office pension fund to massage Government borrowing figures.

Shadow business secretary Alan Duncan said the sale would put the country "further into debt" and leave future generations to foot the bill.

"People will be appalled that the Government has resorted to raiding pension funds in order to plug the black hole in the public finances," he said.

"I fear the Government is going to raid £22bn of pension assets, dump the liability as a mortgage on future generations and dress it up as the salvation of the Royal Mail.

"This is a dangerous plan that must be resisted."