Report on Royal Mail future due

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Business Secretary Lord Mandelson has received the findings of an inquiry into the future of Royal Mail.

The head of the review, Richard Hooper, believes the postal service needs to modernise and become more efficient.

The report may recommend Royal Mail's multi-million pound pension deficit should be met by the government.

But unions are concerned Mr Hooper's proposals, following the year-long review of Royal Mail, will lead to large-scale job losses.

BBC political correspondent Iain Watson said the findings of the Hooper review have been eagerly, if warily awaited by the postal industry as it is likely to deliver some uncomfortable home truths.

Royal Mail will be portrayed as inefficient when compared to its continental counterparts, he says.

And the report will raise questions over the size and scale of its distribution network.

The report by Mr Hooper - the former Ofcom deputy chairman - is also likely to say cost-cutting will not be enough to put the business on a sounder footing.

But the unions will want the cabinet to stamp on any recommendation that Royal Mail should enter a joint venture with the private sector, a move that would not require new legislation, our correspondent says.

The report is expected to be published soon, but in an economic downturn, the business secretary will have to think long and hard about any proposals that could cost jobs, he adds.