ROYAL MAIL wants its £4.5 billion pension deficit and the cost of supporting rural post offices to be at the heart of the Government’s imminent review into its business.

A review by the Department of Trade and Industry of the impact of competition on Royal Mail and of its ability to compete in a fully liberalised market is to be announced shortly. Royal Mail is petitioning the Government to pump at least £2 billion into the business to enable it to compete effectively.

Allan Leighton, the Royal Mail chairman, is lobbying the Government to take responsibility for the pension fund so that it can be removed from Royal Mail’s books. He says that it makes little difference, as the organisation is publicly owned.

Royal Mail also wants the issue of rural post offices, which cost more than £150 million a year to subsidise, to be addressed after Labour failed to make a continued commitment to support them in its election manifesto. The Government’s pledge to subsidise the network runs out in 2008. Royal Mail is also concerned that the network is being supported using money from its own reserves.

Mr Leighton wants a partial sale of the business, including handing shares to employees, which he believes is compatible with Labour’s pledge. Union officials oppose any form of sale.

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