Lord Mandelson has signalled his support in principle for the partial privatisation of Royal Mail, setting the stage for a confrontation between the arch-Blairite business secretary and Labour MPs.

The future of the state-owned postal operator could soon provoke fresh ructions within Labour ranks. Public ownership of Royal Mail is a totemic Labour manifesto commitment for unions and many backbenchers, but the operator’s dire financial position is producing increasing pressure for part-privatisation.