LONDON (AFP) - Britain will on Wednesday flesh out controversial plans to part-privatise Royal Mail, the state-run postal delivery service, following a major restructuring to face the dominance of email.

Business Secretary Vince Cable is set to announce precise details of the privatisation in a statement to parliament from 1130GMT.

Cable recently insisted that there was no alternative' to privatising Royal Mail, with the organisation continuing to face a "fundamental threat" from email.

At the same time however, Royal Mail has enjoyed a surge in a profits thanks to the increasing popularity of online shopping which generates parcel traffic, and owing also to deep cost-cutting and big increases in stamp prices.

Union leaders meanwhile oppose the privatisation plan, warning that customer service will suffer once the business ends up in the private sector.

According to media reports, the coalition government will on Wednesday announce that about 150,000 postal workers are to be handed shares together worth millions of pounds as part of the privatisation deal.

Together the workers are set to own 10 per cent of the new company following a sell-off of Royal Mail said to be worth up to £3.0 billion (S$5.7 billion).

Cable is also expected to confirm that the state will maintain 49 per cent of the company, while the government intends to take on the Royal Mail's pension fund, including its hefty deficit.

The Conservative-Liberal Democrat government, led by Prime Minister David Cameron, relaunched plans to part-privatise Royal Mail three years ago and after the proposal was ditched by the former Labour administration.