Labour postal rebellion growing

Reforming the Royal Mail remains highly controversial

A rebellion by Labour MPs opposed to the part-privatisation of Royal Mail is growing with more than 60 now urging the government to rethink its plans.

The MPs have signed a motion calling on ministers to abandon plans to sell a minority stake in Royal Mail.

Among the 66 signatories is former ministerial aide Jim McGovern who quit last month in protest at the plans.

The government says such a deal would give Royal Mail much-needed cash while still leaving it in public ownership.

Funding modernisation

The Conservatives and the Liberal Democrats both, in principle, support part-privatisation as a way of helping to modernise the service, but are worried about Royal Mail's future profitability and government support for its pension scheme.

Last month an independent review of Royal Mail advocated the sale of part of the business, a proposal endorsed by Business Secretary Lord Mandelson.

In recent years it [Royal Mail] has been exposed to ever-increasing, unfair competition by the regulator Geraldine Smith MP

Dutch firm TNT, one of Royal Mail's main rivals in the UK postal market, is believed to be the frontrunner to acquire the stake - which could be between 25% and 30%.

But this prospect is fiercely opposed by unions and many Labour MPs, making this potentially the largest backbench revolt Gordon Brown has faced since becoming PM.

An early day motion to be put before Parliament on Wednesday will say the plans "risk fracturing one of Britain's greatest public services" and notes Labour members backed the "vision" of a wholly-public service at last year's party conference.

Other former ministers to sign the motion include Frank Dobson, Malcolm Wicks and Michael Meacher.

One of the rebels, Geraldine Smith, said Royal Mail's status as one of the UK's "most respected" public bodies must be safeguarded.

"In recent years it has been exposed to ever-increasing, unfair competition by the regulator," she added. "Part-privatisation is not the answer."

Another rebel, John Grogan, questioned why Royal Mail needed additional financial support when it received a