The Government's plan to part-privatise the Royal Mail has come under attack from a cross-party committee of MPs which complained about a "lack of transparency" about the proposals.
The Commons Business and Enterprise Committee said it did not believe the Government made its case to sell off part of the group to a private firm.
Business Secretary Lord Mandelson faced questions from the committee about why he had cited a 30% figure, while the MPs told ministers they believe the plan would be rejected by TV's Dragons Den or Sir Alan Sugar.
Committee chairman Peter Luff (Con, Mid Worcestershire) said MPs agreed the Royal Mail's multibillion-pound pensions deficit had to be tackled and the regulatory system reformed as a matter of urgency, but it "did not follow" that a part-sale was necessary.
The Government was told it should give more details about any agreement with a private investor before Parliament could approve the Postal Services Bill, which is currently before the House of Lords.
"Parliament is being asked to swap an existing system where it approves every share sale in Royal Mail, for one where it gives up these powers in return for a guarantee that the public's shareholding will always be over 50%. Our report questions whether this is a good bargain," said Mr Luff.
He added that the assessment used by the Government to justify the sell-off was either badly drafted, or there was a "smoking gun" behind the proposals. "We are being asked to give away a lot without any assurances."
The Bill is not expected to be discussed by the Commons until June.
The Communication Workers Union welcomed the report, saying it strengthened consensus around questioning the need for privatisation while recognising the need for pension and regulatory reform. General secretary Billy Hayes said: "Facts are what count in this debate. Everyone who looks at this Bill agrees with the need for pension and regulatory change but, as the Select Committee point out, the case for privatisation has not been made. There is an alternative to be found securing modernisation for a wholly publicly-owned Royal Mail and we urge Government to carefully consider the views of the select committee."
Gordon Brown is facing his biggest rebellion since becoming Prime Minister, with more than 140 Labour MPs signing a Commons motion against the Government's plans.
