THE Government was accused last night of “opening the floodgates” to privatisation of the Royal Mail after backing the idea of foreign investment for the postal business.

Dutch postal firm TNT expressed an interest in exploring a “strategic partnership”

with Royal Mail, a move welcomed by ministers, but attacked by the main postal workers’ union.

Business Secretary Lord Mandelson signalled support for any expressions of interest from other “credible partners”, saying the move would provide a fresh impetus to modernising the Royal Mail.

Private sector investment could be worth 25 per cent of the Royal Mail, industry sources indicated, but the move will face opposition from the union and MPs.

The announcement followed publication of a long-awaited report by Richard Hooper, a former deputy chairman of media watchdog Ofcom, which called for a major overhaul of Royal Mail to secure its future and tackle its multibillion pound pension deficit.

The report said that to improve the Royal Mail’s performance it should forge a strategic minority partnership with a postal operator with a proven record. Lord Mandelson said: “The Government agrees with Hooper’s analysis and recommendations.

We share his ambition for a strong universal service and strong Royal Mail. We intend to take forward the recommendations as a coherent package of measures.

“We will fulfil our manifesto commitment to ‘a publicly- owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment’. Bringing in a partner through a minority stake in the Royal Mail’s postal business will help us deliver that goal.” Peter Bakker, chief executive of TNT, said: “Assuming the UK Government implements the recommendations, I think that exploring a strategic partnership makes a lot of sense for both companies.”

The report recommended that the Government should become responsible for reducing the multi-billion pound pension deficit.

Royal Mail chief executive Adam Crozier welcomed the report, but Communication Workers Union deputy general secretary Dave Ward said: “Seeking private funding from outside companies would open the floodgates for full-blown, damaging privatisation.”