Once again the Government has stopped short of complete action, keeping a foot firmly planted on either side of the fence.

It is typical of New Labour that it has effectively ruled out privatisation of the Post Office but will nevertheless insist on major changes.

For once that sort of action was justified. The decision to back off from privatisation was the correct one. A White Paper on the future of the Post Office will now follow in the New Year when it is expected that a radical reform of the service will answer demands for greater freedom to compete in an ever more global market.

Privatisation of our Royal Mail would have been ill advised. Most people still regard it as a thoroughly public service. They expect their mail to arrive on time, in the knowledge that their 20p stamp is not contributing to huge profits for a privatised company and inflated salaries and income for fat cat directors and shareholders.

At the same time the Royal Mail has to be relieved of some of the shackles of being a nationalised industry which prevent it from properly merchandising itself in a fast-moving commercial world.

Its public image, despite all the high-tech advances in postal sorting made in recent years, is not one of a dynamic concern forging ahead in a commercial whirl but of a rather tired industry struggling to compete in a modern era. This has to be properly addressed.

The Post Office has long been pressing for the ability to borrow on the private money markets, make acquisitions, enter into joint ventures and have more flexibility on pay and bonuses. Today's announcement means this sort of commercial freedom is now within sight.

But by pulling up short of privatisation, the Government has headed off a damaging, costly confrontation with post office workers and, more important, appeased a public which still relishes ownership of the Royal Mail and which is fed up of the obscene fat-cat culture created by the Prime Minister's predecessors. What would have been the point of swapping a nationalised monopoly for a privatised version?

Letters are still the main form of written communication for most of the population, despite the incredible boom in emails and faxes. Let's back our Royal Mail post-haste.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.