Brown under pressure to ditch Royal Mail plan

Gordon Brown faces growing pressure from mutinous Labour backbenchers to ditch or delay moves to partly privatise Royal Mail.

Gordon Brown faces growing pressure from mutinous Labour backbenchers to ditch or delay moves to partly privatise Royal Mail.

Party whips have warned the prime minister, who is already dealing with the “smeargate” scandal, that the plans have stretched the loyalty of his MPs to breaking point.

Lord Mandelson, the business secretary, appears to have made little headway in winning them over. A Commons motion condemning plans to sell a minority stake has been signed by 147 Labour MPs. A rebellion on that scale would leave Brown in the humiliating position of relying on Conservative votes to push the part-privatisation into law.

New research by the think-tank Compass suggests the amount of money the Treasury would raise from the sale has almost halved since last year. It claims a price of £1bn is realistic in the recession but said a minority stake would have fetched an estimated £1.9bn if it had been sold a year ago.