Lord Mandelson yesterday all but killed off the prospect of the Royal Mail being part-privatised before the General Election after he shelved the contentious plan, a move described by opponents as a �humiliating climbdown�.

Lord Mandelson yesterday all but killed off the prospect of the Royal Mail being part-privatised before the General Election after he shelved the contentious plan, a move described by opponents as a "humiliating climbdown".

The Business Secretary told the Lords there was "no prospect" of the sale going ahead in the current economic circumstances.

The move was signalled just a few days ago when Lord Mandelson admitted the flagship Postal Services Bill was being "jostled" for space in the legislative programme.

Yet yesterday, he said the state of the economy made it "impossible" to obtain value for money for the taxpayer and added: "When market conditions change, we will return to the issue."

Given the huge rebellion on Labour backbenches, the political reality is that an already weakened Gordon Brown could not risk the possibility of a Commons defeat by his own side.

Last night, the Prime Minister said: "Peter Mandelson made this decision. We looked around the marketplace and there are not any buyers or the investors that we would want to see."

Kenneth Clarke, Shadow Business Secretary, said the UK Government was in a "state of paralysed indecision" on every difficult decision.

He went on: "The first reason for delay was lack of parliamentary time, which is plainly nonsense. It is now said that market conditions are difficult for a sale. The real reason for delay is that Peter Mandelson cannot persuade his colleagues to back the flagship Bill of his department."

John Thurso for the Liberal Democrats said: "It is quite clear Gordon Brown no longer has the political will to fight the unions and opponents on his own backbenches."

Mike Weir for the SNP said: "Privatisation of Royal Mail should be ruled out once and for all."