The sale of Royal Mail forms part of a wider programme of cuts and savings unveiled by government finance chiefs today.
Chancellor George Osborne revealed he would sell off taxpayers' remaining 30 per cent stake in the postal firm, worth around £1.5 billion, on top of a £3bn package of other asset sales and efficiencies.
The extra savings will add to the £13bn of cuts already being made by Whitehall departments, and include:
- Savings in the higher and further education sectors
- Administration costs reduced at bodies overseen by the Department for Education
- Similar cost-cutting at bodies overseen by the Department for Culture, Media and Sport
- The Department for Transport will sell £345m worth of land around King's Cross
The NHS, schools and international aid budgets have been protected from any of the additional cuts.
Labour have accused Chancellor George Osborne of "ripping up" his long-term plan after he announced an extra £4.5 billion of budget cuts.
The package of asset sales and additional savings comes on top of £13bn of spending reductions already set out - and includes the sell-off of the government's remaining 30 per cent stake in Royal Mail.
During a debate in the Commons today, Shadow Chancellor Chris Leslie told Mr Osborne:
It sounds to me as though any semblance of a long-term plan has been totally ripped up, that we've got panic in the Treasury, that we've got chaos with in-year public spending decisions taken.
Why didn't you announce those in the March Budget if they were part of some sort of long-term continuum?
Have you suddenly decided to rapidly change your course when it comes to public expenditure in that way and why do it in such a shabby way?
To laughter, Mr Osborne replied: "Only the Labour Party will think it's 'shabby' to make an announcement first in the House of Commons. We set out two weeks ago that we were going to find further efficiencies and savings in government. That is what we deliver today."
The government is to sell off its remaining 30 per cent stake in Royal Mail, Chancellor George Osborne has announced as he set out proposals for cutting departmental spending by £3 billion this year.
The stake is currently said to be worth around £1.5 billion.
Speaking during a debate in the House of Commons, he told MPs it was the "right thing to do".
I am today announcing that the Government will begin selling the remaining 30% shareholding we have in the Royal Mail.
It is the right thing to do for the Royal Mail, the businesses and families who depend on it - and crucially for the taxpayer.
Initial reports suggest none of the shares being offered up for sale will be reserved for employees, who received 10 per cent during the last sell-off.
Chancellor George Osborne has said government departments have found an extra £4.5 billion for the current financial year.
Postal workers will be asked to report low-level crime or suspicious incidents to the police under a new trial scheme.
Royal Mail said more than 130 postmen and women in Winchester, Hampshire, will take part in the Mail Watch initiative.
Tony Marsh, director of security at Royal Mail, said:
Royal Mail postmen and women collect and deliver mail six days a week and have almost-unrivalled knowledge of the communities they serve.
We are proud to be formalising our working relationship with Hampshire Constabulary and Neighbourhood Watch through the launch of this important initiative, and look forward to playing our part in creating a safer community.
Postal workers have been urged to make official requests for any information held about them if they suspect their names were kept on a "blacklist" of thousands of workers.
The secret file of over 3,200 mainly construction workers was uncovered in 2009 after a raid by the Information Commissioner's Office (ICO) on the Consulting Association.
Workers were included on the blacklist for raising health and safety concerns on building sites, or merely for being union activists, and were often denied work for years as a result.
It has recently been revealed that other workers, including firefighters, teachers and postal staff, also had their details included on the blacklist.
Dave Smith, of the Blacklist Support Group, told the annual conference of the Communication Workers Union, that postal workers should contact the ICO if they suspected their names were on the blacklist.
"People in this hall will definitely have been spied on by undercover police," he told the Bournemouth conference.
The price of first and second class stamps is to increase by 1p each to 63p and 54p from March 30, the Royal Mail announced today.
Sending a large letter will increase by 2p to 95p for first class and by 1p to 74p for second class.
Second-class medium parcels weighing up to 2kg will be priced at £4.89, which Royal Mail said represents a saving of up to £3.11.
The postal group said it had thought "carefully" about the impact on its customers before deciding to raise letter prices, adding that it recognised how the recent tough economic conditions had made it difficult for consumers and businesses.
Stamp prices in the UK were among the best value in Europe, it added.
The man who oversaw the controversial privatisation of Royal Mail will be stepping down later this year, the postal firm has announced.
Chairman Donald Brydon, who has been in the post since 2009, will continue work until at least the annual general meeting in the summer, but a statement from the company revealed the search for his successor had already begun.
I am proud of what Royal Mail has achieved as a company in the last six years.
Our transformation is well underway and we are now a FTSE 100 listed company. I feel that now is the right time for me to make this decision.
Business Secretary Vince Cable has accused the boss of Royal Mail of "scaremongering" in claiming the universal post service is under threat.
Chief executive Moya Greene has warned that the high cost of the service, which ensures a same-price delivery for letters anywhere in the UK, six days a week, is not sustainable in the face of competition in high-density, low-cost areas.
ITV News business editor Joel Hills reports: