Westminster

Labour will reach “breaking point” with the unions if the Government presses ahead with plans to part-privatise the Royal Mail, the party was warned yesterday.

Ministers signalled that they were determined to sell a stake to modernise the ailing postal service and plug a £7 billion pension deficit. Lord Mandelson, the Business Secretary, has been asked to address Labour MPs on Monday to head off a Commons revolt. MPs are to debate plans for the postal service on Wednesday, although it has been called by the Conservatives, so a big Labour rebellion is unlikely.

Royal Mail denied planning to cut 16,000 jobs, a tenth of its workforce, after sending letters to some staff offering voluntary redundancy.

Billy Hayes, the general secretary of the Communication Workers’ Union, said: “The current government plans are a defining moment in the relationship between the unions and the Government. The relationship will be severely strained towards breaking point.”

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