By Matthew West
The Cabinet is split over the future of the Royal Mail it has emerged as Harriet Harman was revealed as having attempted to delay the publication of tomorrow's bill before Parliament that will part-privatise the service.
More than 100 backbench Labour MPs are also thought to oppose the plan creating the potential for a significant showdown between Gordon Brown and his own party at a time when the polls show that many voters think Labour would be better off with a new leader.
Ms Harman, the deputy Labour leader, is believed to have argued for more time to consider the position of the Royal Mail before the business secretary Lord Mandelson, published the proposed legislation. She is thought to have wanted more concessions for Labour MPs who oppose the sell-off.
Reports suggest she was overruled by Gordon Brown and Lord Mandelson during a sub-Cabinet meeting, who both argued it was right to push ahead with the bill, which would mean a stake in Royal Mail being sold.
The revelation that the deputy leader opposed both the prime minister and Lord Mandelson will add further fuel to the rumours that she has been positioning herself to challenge for the Labour leadership when Mr Brown steps down, despite fierce denials from Ms Harman at the weekend.
The bill itself may also prove to be a true test of how in control the prime minister is of his own party given the level of opposition among backbench MPs and his weakened position in the latest ICM poll, published yesterday, in which 63 per cent of voters said Labour would be better off with a new leader.
Meanwhile, opposition from the unions has been fierce, yesterday the Communication Workers Union,(CWU) hosted an event at Central Hall opposite Westminster Abbey, were postal workers made their feelings about the proposed 30 per cent sell off known.
"When he publishes the bill. it may be time to publish our own timetable of when to disaffiliate from the Labour party," threatened Dave Ward, the CWU's deputy general secretary (postal) told politics.co.uk.
"People like [Lord] Mandelson and [Gordon] Brown don't stand up for British workers, for British postal workers. It if means our members have to take strike action to defeat this, we will be doing it. No fear."
Unite joint general secretary Derek Simpson has also condemned the "spivs and the speculators" in business and said if the government could find money to bail-out the financial sector, it could "find the money to modernise this important public service".
Paul Kenny, general secretary of the GMB union, agreed, telling the prime minister: "You're doing this in the name of the free market dogma that got us into so much c**p in the first place."