One hundred MPs to rebel over sale of Royal Mail

More than 100 Labour MPs are ready to defy the Government and join a guerrilla campaign against moves to sell off a stake in Royal Mail.

The backlash against the part-privatisation – with plans being drawn up for protests around the country – threatens to present Gordon Brown with his biggest rebellion of 2009.

Labour whips have already warned ministers about the strength of feeling over the moves which would hand a stake of between 25 and 33 per cent in Royal Mail to a foreign buyer. The current Labour majority is 63, which would be wiped out if only 32 MPs defy the Government, leaving ministers in the embarrassing position of needing Conservative support to get the measure through the Commons.

Backbench rebels – who claim the proposals contradict Labour manifesto commitments – have already met Lord Mandelson, the Business Secretary, and are demanding he modify the plans. They are also linking up with the Communication Workers Union which is planning to hire management consultants to draw up an alternative model for Royal Mail that keeps it entirely in public hands.

Jim McGovern, who was a parliamentary private secretary in the Department for Business and Enterprise, has already resigned in protest against the policy. Some ministers are also believed to oppose the plans and may threaten to resign if forced to vote on the issue in the Commons. Given the pressing financial problems facing Royal Mail, legislation would need to be introduced by the summer.

A spokesman for the Compass think-tank, which is campaigning against the proposals, said an early-day motion criticising the part-privatisation would be tabled after the Commons returns on 12 January. He said: "We expect at least 100 Labour MPs to support it." One Labour MP added: "We believe at least half the parliamentary party are against the idea. So are a lot of ministers too, if only they were free to speak."

An early indication of the hostility came after the proposals were announced in the Commons by Pat McFadden, the Post Office minister, when no Labour MP spoke in favour of the part-privatisation.

The critics included the former ministers Peter Hain and Kate Hoey. Lord Mandelson also had a chilly reception when he spelt out the proposals at a private meeting with Labour MPs in the Commons last week. The Labour MP for Linlithgow and East Falkirk, Michael Connarty, said: "If someone tried to bludgeon it through it would be voted down."

Mr Connarty, secretary of the CWU parliamentary liaison group, called on the Government to turn round Royal Mail's fortunes by heavy investment in new technology to put it on an even footing with its European rivals. Lindsay Hoyle, MP for Chorley, said: "MPs feel very strongly about this and they are rallying together. We have now got to find out exactly what the Government is going to come forward with."

A cabinet minister told The Independent that the Government anticipated fierce resistance on its own benches to Lord Mandelson's proposals and would "patiently explain" the situation to MPs. But he insisted that the financial problems faced by Royal Mail were so serious that ministers were determined to press ahead with reform. Lord Mandelson said the move was essential to preserve deliveries six days a week to every address in Britain.

The Government also says that Royal Mail lags way behind other western European postal services in levels of modernisation.

As part of the campaign against the proposals, Compass is preparing alternative concepts for a publicly owned Royal Mail linking up with post offices that would be transformed into a national network of "people's banks" offering cheap banking.