Coalition asks Hooper to look again at Royal Mail sale

Sir Richard Hooper, the brain behind Lord Mandelson's plans for a part-privatisation of the Royal Mail, has been approached by the new coalition Government to refresh his 2008 report.

Lord Mandelson's successor as Business Secretary, the Liberal Democrat Vince Cable, wants to honour his party's election pledge to sell a 49 per cent stake in the Royal Mail. The rest would be shared between Government and postal workers.

This goes further than Lord Mandelson's idea, which was to offload 30 per cent.

Sir Richard, a former deputy chairman of communications regulator Ofcom, led a review into the Royal Mail in late 2008, recommending a partnership with the private sector.

However, this led to strikes causing 30 million pieces of post to be delayed – workers believed that a part-privatisation could cost up to 50,000 jobs. Although there was significant private-sector interest, including from the Dutch postal giant TNT, Lord Mandelson dropped the proposals last year as the Labour government was unable to get the price it wanted.

An industry source said that Sir Richard and Business Department officials are in the "early days of talks", but that another look at his recommendations seemed inevitable.

A department spokesman said: "Ministers will want to hear from a range of people with knowledge and interest in this area as they begin to develop their plans."

The revelation that the Lib-Con coalition has decided to sell a stake comes in a week when the fully nationalised group has proved that it is hugely successful. Royal Mail announced a pre-tax profit of £404m, up 25 per cent on the previous year.

However, a sale would raise much-needed cash for the government.

The Treasury is also reviewing several loans that Lord Mandelson agreed in principle to give to businesses prior to the election.

This includes £80m to Sheffield Forgemasters, a specialist engineer for the nuclear industry. Its group director, Peter Birtles said he would be "absolutely staggered" if the coalition decided to veto the loan, which would create up to 400 jobs in South Yorkshire.