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Royal Mail will be sold to a Czech billionaire in a £3.6bn deal, taking the postal service out of British ownership for the first time in 500 years.

Ministers have given the green light to the sale of Royal Mail to Daniel Kretinsky, the tycoon known as the “Czech sphinx”.

As part of the deal, the Government will retain a “golden share” in the company, giving it control over any major governance changes.

Staff will also be handed 10pc of any dividends paid out to Mr Kretinsky, while postal workers will be granted a greater say in how the company is run through a new workers group that will meet with bosses once a month.

The concessions, which follow weeks of negotiations, are in addition to previously announced undertakings made by Mr Kretinsky’s EP Group.

These include maintaining Saturday deliveries for first-class letters, protecting the Royal Mail brand and keeping the company’s headquarters and tax base in the UK.

Jonathan Reynolds, the Business Secretary, said the agreement was “yet another example of this Government’s commitment to working hand in hand with business”.

He added: “We are working towards ensuring a financially stable Royal Mail with protected links between communities other providers can’t reach.”

‘Time for a fresh start’

Dave Ward, the general secretary of the Communication Workers Union, said that while many fear Royal Mail falling into foreign hands, the status quo would result in postal services being killed off completely.

He said: “The Royal Mail Group Board have been running the company into the ground over a sustained period and in the process have completely alienated their own workforce. It is time for a fresh start and a complete reset of employee and industrial relations.”

Mr Ward added: “At the same time as this agreement is announced, we are pleased to have reached a negotiators settlement with EP Group covering crucial areas such as job security, the governance of the company, a meaningful stake in the business for employees, restoring quality of service, legally binding commitments and improving the terms and conditions of our members.”

The deal includes a pledge for no compulsory redundancies until any reforms to Royal Mail’s universal service obligation are deployed, which is not expected until the second half of 2026. A further deal on jobs will be negotiated after that point.

The agreement with the CWU is subject to ratification by the union’s postal executive, which will meet later on Monday.

The swoop by Mr Kretinsky, who is already the largest shareholder in Royal Mail’s parent company International Distribution Services (IDS), attracted scrutiny on national security grounds given the crucial role paid by Britain’s postal service.

Mr Kretinsky is already a major investor in the UK, holding stakes in Sainsbury’s and West Ham United Football Club. The billionaire made his fortune through energy, with a major holding in a crucial pipeline that pumps Russian gas to Europe.

The tycoon, who also has a major stake in Dutch postal service PostNL, has made a number of guarantees aimed at preventing any break-up or asset stripping of Royal Mail. EP Group will also write off a £600m loan owned by Royal Mail to its parent company.

His takeover comes at a tough time for Royal Mail, which is battling to turn around its fortunes amid a sharp downturn in letter sending.

The company, which posted losses of £349m last year, was last week handed a record £10.5m fine after delivering more than a quarter of first-class letters late.

Bosses are pushing for an overhaul of Royal Mail’s universal service obligations, including scrapping second-class post on Saturdays, arguing that the rules are no longer sustainable.

Mr Kretinsky is expected to invest around £800m to expand the company’s parcel operations by rolling out parcel lockers and undercutting rivals.

In a statement, Mr Kretinsky said: “EP Group is a long term and committed investor with a mission to make Royal Mail a successful modern postal operator with high quality service and products for its customers.”

Keith Williams, the chairman of IDS, said: “Today’s announcement marks an important milestone in the approvals process. The IDS board welcomes the Government’s endorsement and legal backing for the comprehensive package of undertakings and commitments we negotiated.

“These provide our customers, colleagues, unions, regulators and broader stakeholders with safeguards for the provision of the Universal Service Obligation, the ongoing financial stability of Royal Mail, the maintenance of colleague benefits, and Royal Mail’s broader role in the United Kingdom.

“We welcome the Government’s commitment today to secure a stable future for Royal Mail. This will not come from a change in ownership alone but must also be backed by urgent reform of the Universal Service and the continued transformation of this great British business.”