Lord Mandelson has conceded that his controversial plan to sell off a stake in the Royal Mail may be delayed in the face of fierce opposition from MPs and trade unions.

The Business Secretary is preparing a radical new reform agenda for the Government, designed to reinvigorate the Labour administration and outflank the Conservative opposition.

His proposals will be jostling for position with a similar campaign, to be called "Building Britain's Future", due to be launched today by Gordon Brown, the prime minister.

The Times reported last week that Alistair Darling, the Chancellor, has delayed a Treasury proposal on bank reforms that was originally due this week so as not to clash with Lord Mandelson's objectives.

In an interview with the Financial Times today, Lord Mandelson claims that the UK is through the worst of the recession and a recovering economy will help to boost Labour's popularity, though conceded that the downturn would make the sale of a stake in the group more difficult to achieve.

Lord Mandelson admitted that his proposed legislation to part-privatise Royal Mail, due to be put to the House of Lords before the summer recess, would now probably be delayed.

More than 40 MPs, mainly Labour, have fiercely opposed the move, which they claim will pave the way for a full sell-off of the UK's postal network.

Lord Mandelson said: "I want to retain the slot, but ... I have to concede that the original linking of the legislative passage and the bidding process for the strategic partner has been decoupled."

A date for the second reading of the Postal Services Bill, which cleared the House of Lords last month, has yet to be set. The Government insisted that it remained commited to bring the legislation before Parliament, but conceded that no slot had been booked for a reading within the next two weeks.

The Business Secretary said that he still planned to introduce legislation before the election, expected during 2010, and repeated his insistence that there would be no taxpayer bailout of the UK's postal services.

The Government has been trying to sell off up to 25 per cent of the Royal Mail, which has been struggling to modernise its workplace practices, and tackle a ballooning pensions deficit.

Only one bidder, the private equity firm CVC Capital Partners, has emerged. It is thought to have submitted an initial bid of less than £2 billion.

The Government, alongside Adam Crozier, Royal Mail's chief executive, has long argued that Royal Mail must adapt to survive, and a third party stakeholder would provide much-needed capital to support its development.

Royal Mail, which has been locked in regular battles with its workforce over changes in working hours, already has to compete with rivals in delivering parcels.

Donald Brydon, Royal Mail's new chairman, has threatened to shut the group's generous final salary pension scheme if the part sell-off is unsuccessful.

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