David Cameron said the Royal Mail is at a "massive disadvantage" being owned by the Government and the business would be "set free" by privatisation.
The Prime Minister told BBC London radio:
Royal Mail operates in a competitive market, and right now being owned by the Government is a massive disadvantage. You can't get out there, borrow money, access expertise and capital from the private sector.
Effectively we are setting this business free to be able to do that, to respond to the competition.