The government hopes to give Royal Mail access to the capital it needs to move on its privatisation plans this financial year, business minister Michael Fallon has said.

Fallon said that selling shares in the company will give Royal Mail future access to the finance it needs, but it does not intend to sell the firm “cheaply”.

In a speech to the Policy Exchange last night (29 April) Fallon also said an initial public offering (IPO) would be the government’s preferred method of sale, but a private sale would still be an option.

Fallon also revealed that the Department for Business, Innovation and Skills (BIS) hopes to form a syndicate of banks to advise on a possible IPO by the end of May.

Fallon said: “Now the time has come for government to step back from Royal Mail and allow its management to focus wholeheartedly on growing the business and planning for the future. This government will give Royal Mail the real commercial freedom that it has needed for a long time.”

Royal Mail chief executive Moya Greene last year said that 2013 is a "good aim” for the sale of the company.