Royal Mail is facing the prospect of part-privatisation after Lord Mandelson, the Business Secretary, today revealed that TNT, the Dutch postal giant, has made an approach to invest in the stricken service.

Outling the recommendations made in a report by Richard Hooper, a former deputy chairman of Ofcom, Lord Mandelson told the House of Lords that TNT had expressed an interest in exploring a “strategic partnership” with Royal Mail.

He said that the Government would also welcome expressions of interest from other “credible partners”.

The Times revealed today that up to 50,000 jobs could be lost in a partial privatisation of the Royal Mail.

But Lord Mandelson said:"...to improve the Royal Mail’s performance, it should forge a strategic minority partnership with a postal operator with a proven record in transforming its business, working closely with the workforce.

"This, Hooper believes, would give Royal Mail the confidence, the experience and the capital to make the changes needed to improve performance and face the future. In other words, save the Royal Mail by investing in its future."

In a stark warning, Lord Mandelson said: "The status quo is untenable. The universal service is under threat. The choice we face is either downgrading the universal service as we manage decline or acting now to turn things round and secure the Royal Mail’s future."

The report found that Britons send five million fewer letters than two years ago but the number of text messages sent in the UK last year hit 60 billion.

Mr Hooper estimates that the shift to new technologies has cost Royal Mail £500 million in lost profits.

Lord Mandelson said: “Without far-reaching change, the opportunities brought by technology will become overwhelming threats.”

The Hooper Report also recommended that the Government take over responsibility for reducing Royal Mail's pension deficit, which is set to nearly double from £4 billion to £7 billion next year.

The report said: "Each year, on top of its regular £500 million contribution to the pension fund, the company is having to find an extra “top up” of £280 million to plug the deficit."

It added: "The Report recommends that as part of a package of changes, the Government should take over responsibility for reducing substantially the pension deficit."

Finally, Mr Hooper suggested that Ofcom assume the regulation of Royal Mail from Postcomm.

Lord Mandelson said the report suggested "a lack of trust in the relationship between the company and the regulator".

He said: "There are disagreements about basic information and these tensions divert energy from the chief challenge of modernising the business."

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