By politics.co.uk staff
The bill which will part-privatise Royal Mail may be put off until after the summer recess, Lord Mandelson has admitted.
The business secretary, who has been pushing for the move since the beginning of Labour's time in power, suggested the bill was "jostling for space" in the government's legislative programme.
But parliamentary observers suggest the delay may have more to do with what is expected to be a massive Labour rebellion against the plans.
"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," Lord Mandelson wrote in the Financial Times.
Over 140 Labour backbenchers have signed a Commons motion calling for the plans to be scrapped.
Chief of staff to the leader of the Liberal Democrats, Danny Alexander, said: "This is a purely political decision made because the government is desperate to avoid another humiliating defeat.
"The idea that this should be postponed because there is no space in the legislative agenda is completely bogus.
"Any MP will tell you there is more than enough time to debate it properly."
David Cameron, who supports the plans, seized on the comments at his monthly press conference today, as evidence of the government's incompetence and lethargy.