WORCESTER'S Labour parliamentary candidate has clashed with Robin Walker over the Royal Mail sell-off - amid claims taxpayers have been ripped off.

Councillor Joy Squires says families in Worcester are angry about the "botched" flotation of the postal service, which has been criticised by a spending watchdog this week.

But the city's MP says the saga is "a big fuss about nothing" and blames workers threatening to strike as the reason for the poor deal.

Since last year's Royal Mail sell-off share prices have risen 70 per cent.

At the time of the offer interest in it soared, with people around the country from pensioners to postal workers rushing to grab a slice of it.

A new report from the National Audit Office now says the sale was rushed, it was on offer too cheaply and concluded ministers "could have achieved better value for the taxpayer".

Coun Squires said: "People in Worcester will rightly be asking what the Tories were thinking of when they sold off the Royal Mail for such a price.

"And this week stamp prices have gone up yet again, following a hike of 30 per cent in the price of a first class stamp last year.

"Hundreds of people in Worcester joined the campaign to save the Royal Mail last September, fearing the very thing we are seeing now - a handful of people making a killing out of a profitable public service."

Last year the flotation took place amid threats of strike action from disgruntled workers.

Mr Walker said: "Yes, the share prices have gone up but that's largely because the threat of strike action has gone away.

"The important thing here is that Royal Mail is no longer competing with schools and hospitals for scarce public funds.

"The Government still has a stake of its own which it can sell at a higher price.

"Anyone can say that when shares trade at a price significantly above what they were, you've got a bad deal, but imagine if the Government sold its stake and shares then went down.

"You'd have private investors and even postal workers losing money, that would be a much bigger scandal.

"The main difference is that the threat from the unions has gone."

Shadow business secretary Chuka Umunna has labelled it "a first-class disaster" but Vince Cable, who led the sell-off, insists he was right to have been cautious.