Air traffic control is next on the sell-off list

Privatisation of Britain's air traffic control has been put back on the agenda by the Cabinet as part of a plan to rebut criticism that the Government has run out of ideas.

Nuclear Electric is also pushing hard to fill the gap in the Queen's Speech caused by the cancellation of Royal Mail privatisation with a Bill to privatise nuclear power.

Sweeping aside all thoughts of retiring from public life after losing the Post Office Bill, Michael Heseltine said that the Queen's Speech for the next session would be ``relevant, radical, forward-looking - the Gracious Speech of a government in charge''. Ministers are keeping some items secret to maximise the impact of the speech on 16 November.

Kenneth Clarke, the Chancellor, said ministers had ``ferociously'' argued over bids for legislation during Thursday's three-and-a-half-hour Cabinet meeting and promised the programme would contain ``extremely dramatic'' measures. ``The fact that we are moving away from privatisation of the Post Office is a disappointment to me and the Post Office but it does open the way for other parts of the Government's programme,'' he said.

Another Cabinet source said the speech would include privatisation and deregulation measures: ``We have not run out of steam. It would absurd to say that. Just wait and see.''

Plans to privatise the 3,500-strong National Air Traffic Services had been left out of the legislative programme because of lack of parliamentary time. Another ministerial source said: ``It is not settled, but there may now be room in the Queen's Speech. It is back on the agenda.''

Pilots and trade unions have registered opposition and some airlines fear it could increase charges. The Government has denied that it could undermine safety.

The Post Office and the unions called on the Chancellor to relent over his refusal to relax the rules for commercialising the Royal Mail within the public sector. But Mr Clarke said it would not be allowed to borrow freely, so as to keep control on the Public Sector Borrowing Requirement.

The Chancellor has summoned colleagues to a pre-Budget Cabinet spending committee on Tuesday. Tory MPs who met him this week said lower than expected inflation could allow him to cut pounds 6bn from increases in spending without closing hospitals or cancelling road schemes.

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