The Government is coming under further pressure over its controversial plans to part-privatise the Royal Mail as workers stage a protest calling for the postal operator to remain in public hands.
Ministers were on a collision course with Labour MPs as they stood firm over the plans amid hints of a new light-touch regulatory regime in the postal industry.
Opposition from Labour backbenchers was growing, with more than 70 MPs backing moves to reject plans to sell a minority stake in the postal group, threatening Gordon Brown with his biggest Commons revolt.
The Communication Workers Union is due to hold a protest in Westminster urging Labour to keep the Royal Mail wholly publicly owned.
General secretary Billy Hayes said plans backed by Business Secretary Lord Mandelson to sell a minority stake in Royal Mail posed a "serious threat" to the UK's postal service, adding: "There is no need to privatise and sell stakes in key public sector businesses to get Government assets, particularly Royal Mail, to perform."
Lord Mandelson stressed there was "no question" of privatising the Royal Mail - but he made clear the Government was pressing ahead with its plans.
Appearing before the Commons business and enterprise committee before meeting with the Labour rebels, Lord Mandelson expressed "regret" at the way the postal market had been opened up to competition in 2006.
He said he was prepared to consider making "adjustments" when responsibility for regulation passed from Postcom to the communications industry watchdog, Ofcom, under the Government's planned changes.
Lord Mandelson insisted the Royal Mail needed a new partner to bring in the "hundreds of millions of pounds" it needed in new investment as well as a "gale force of fresh air" into the organisation's management and culture.
