Hundreds of postal workers in Huddersfield will be handed  free shares as part of a controversial privatisation of Royal Mail.

They will be among 35,000 employees across the North and up to 150,000  UK-wide to be gifted 10% of the new  company under the £3bn sell-off,  which will begin over the next year.

Business Secretary Vince Cable said:  “These shares will be free to eligible  employees, recognising that many of  them would otherwise find them unaffordable.”

Mr Cable said the final proportion  of Royal Mail to be sold would depend  on market conditions, although it  would be a majority stake.

The shares will be available to the  general public as well as institutional  investors under the terms of the initial  public offering.

The Government hopes that the  offer of free shares to staff – who will  also get priority if they want to buy  more – will ease vehement opposition  to the privatisation being led by the  GMB union.

Mr Cable told the Commons: “This  is logical, it is a commercial decision  designed to put Royal Mail’s future on  to a long-term sustainable basis.

“It is consistent with developments  elsewhere in Europe where privatised  operators in Austria, Germany and  Belgium produce profit margins far  higher than the Royal Mail, but have  continued to provide high-quality and  expanding services.

“Now the time has come for Government to step back from Royal Mail,  allow its management to focus wholeheartedly on growing the business and  planning for the future.”

The company will be listed on the  London Stock Exchange by the end of  the financial year, he added.

Labour’s Chuka Umunna said the  Government had failed to provide any  justification for acting now.

“Having nationalised the organisation’s debts by taking on its pension  liabilities, they now want to privatise  the profit at the very time it is making  money. How on earth does that make  any sense?” he said.

The National Federation of SubPostmasters joined unions in condemning the plan, saying the  Government was taking an “utterly  reckless gamble” with the future of the  post office network by going ahead  with plans to sell Royal Mail.