Lord Mandelson told peers today that there is "no prospect" of the partial sell-off of the Royal Mail going ahead in the "current circumstances".
The state of the economy had made it "impossible" to complete a deal on favourable terms, Lord Mandelson said.
This is a more emphatic declaration of the Government’s intentions about Royal Mail than the business secretary’s interview with the BBC on Monday when he said that because the legislative programme was too tight.
A bill enabling the sell-off, opposed by many Labour MPs and the postal workers union, had been due to go before Parliament before the summer break.
"When market conditions change we will return to the issue," he told peers today.
It is unlikely that a sale will happen until after the next election, experts believe. Tory leader David Cameron supports the idea of reforming Royal Mail but was not certain to vote in favour of the bill as it currently stands.
In an interview with the Financial Times at the weekend, Lord Mandelson implied that the recession meant that a partial sell-off at this time would not raise the required amount of cash to enable Royal Mail to correct its finances which the business secretary said had reached "crisis point".
"I want to retain the slot, but... I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled," Lord Mandelson told the FT.
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