Royal Mail’s future as a state-owned enterprise is bleak. Without radical surgery, and a huge injection of private capital, the postal operator will struggle even to compete let alone prosper when Europe liberalises its mail markets fully in 2011. Lord Mandelson, business secretary, is right to signal his support in principle for the part-privatisation of Royal Mail. Trade unions and Labour party MPs will protest. But the bigger challenge could be finding a buyer.

The political obstacles to privatisation are considerable. The Labour party, under pressure from the Communication Workers’ Union, which provides it with funding, promised in its 2005 election manifesto to keep the Royal Mail in public hands. Ditching that pledge now would almost certainly trigger an internal party revolt, something Gordon Brown, prime minister, does not need as he grapples with the global financial and economic crisis.