Heseltine faces opposition to early Royal Mail sell-off

Michael Heseltine, President of the Board of Trade, is pressing for early privatisation of the Royal Mail against strong opposition from Cabinet ministers and party managers who want to defer or shelve the plan.

John Major has stepped into the conflict over whether privatisation should go ahead amid doubts in sections of the Government about the wisdom of such a potentially controversial measure in the third session of the current Parliament.

Although overshadowed by Europe, the issue has moved close to the top of the domestic agenda as a totem of a dispute between 'radicals' - and 'consolidators' who would prefer to concentrate on the delivery of existing reforms rather than embark on new ones.

Mr Heseltine, who is thought to have the support of Kenneth Clarke, the Chancellor, derided 'consolidation' at the Conservative Central Council in Plymouth at the weekend and while Whitehall sources insisted that he did not specifically have the Post Office in mind, his language was widely interpreted as indicating that he had not given up the struggle to secure early privatisation of Royal Mail.

Mr Heseltine's backbench supporters have been arguing that Post Office counters should be left in the public sector - thus avoiding a row over the future of rural sub-Post Offices - but that Royal Mail should be privatised. They point out that the board of the Post Office is pressing for privatisation and that it would be a popular public flotation.

But the consolidators have been urging Mr Major - who has taken informal advice on presentational issues from Sir Bernard Ingham, Baroness Thatcher's former press secretary and a close former colleague of Chistopher Meyer, the new Press Secretary - to show caution. They question the logic of selling a popular and efficient service like Royal Mail while leaving the more widely-criticised counters business in the public sector.

Fresh inter-party controversy over tax erupted yesterday when Harriet Harman, shadow Chief Secretary, challenged Mr Clarke's claim on the BBC's On the Record that people had been 'given an exaggerated impression' of the impact of next month's tax rises and they would amount to around pounds 5.75 per week on average.

She accused Mr Clarke - who based his figures on all households including those not paying income tax - of misleading taxpayers. Ms Harman said the true average rise was pounds 10 per week.

Meanwhile John Redwood, Secretary of State for Wales, will open up another front today with a speech challenging some environmental orthodoxies and will argue that planning matters should be left more to local councils.