LONDON (REUTERS) - Britain embarked on its largest privatisation in decades on Thursday when it said it would float the majority of the near 500-year-old Royal Mail postal service.

Britain said a stock market flotation would take place in the coming weeks with the public able to buy into the postal network and 10 per cent of shares given to Royal Mail staff.

It said the size of the sale would depend on market conditions with analysts suggesting the flotation could value Royal Mail, which traces its roots to a service founded by King Henry VIII in 1516, at 2-3 billion pounds (S$4-S$6 billion).

"HM Government will retain flexibility around the size of the stake to be sold, as this will be influenced by market conditions at the time of the transaction, investor demand and the objective to ensure that value for money for the taxpayer is achieved," the government said in a statement.

The privatisation of Royal Mail, which has around 150,000 staff, is designed to help fund the modernisation of the postal operator's business but has been fiercely opposed by unions concerned about threats to jobs and pay.

The government said Royal Mail would pay a dividend and proposed a final dividend to be paid in July next year of 133 million pounds with the intention of pursuing a progressive dividend policy in coming years.

Goldman Sachs and UBS are acting as lead advisers for the share sale.