Speculators, hedge funds and investment banks will grab the choice cuts of Royal Mail while the public is thrown scraps, MPs said yesterday, as the government announced there have been over 700,000 investor applications for postal service shares.

Business Secretary Vince Cable revealed the figures during a grilling from members of the business select committee amid concerns that the business, and some of its properties, was being undervalued.

Applications for Royal Mail shares from private investors have been up to seven times oversubscribed, Mr Cable said.

Around 30 per cent of shares have been set aside as so-called retail shares, while the lion's share is dished out to institutional investors.

Committee chairman and Labour MP Adrian Bailey said the minister was overseeing the sale of a profitable, popular, publicly owned company to financial institutions he had criticised in the past.

Mr Cable said he was "very comfortable" with the deal however, stressing the government wanted to secure a "long term, responsible" investor base from organisations such as pension funds.

Conservative MP Brian Binley asked why the government was "discriminating" against Royal Mail employees who will lose their free shares if they leave the company within three years.

Mr Binley said: "I suspect Royal Mail will downsize some of its operations within three years and employees who lose their jobs will lose their shareholding. Don't you feel you are being unfair?"

Mr Cable replied that so-called "good leavers," such as those made redundant or who resign on health grounds, would be protected.

Earlier in the day MPs voiced fresh concern that the privatisation will be "highly lucrative" for speculators, hedge funds and investment banks rather than the public.

An early day motion was tabled by the SDLP calling on the coalition to review its decision, warning that the commitment to deliver six days a week could be "watered down."

Opposition to the sale was also felt outside Parliament, as CWU members took to the streets in demonstration. Union members are expected to back industrial action over privatisation, with any strike set to be held on or after October 23 - the run-up to the busy Christmas period.

CWU member Nicky Carter told the Star: "Workers are outraged. Four hundred years of public service being sold to the fat cats. I have a message for Ed Miliband - tell the public you will renationalise Royal Mail. That will win a massive amount of votes."

The Northern Ireland Assembly passed a motion saying the Royal Mail is a vital public service which should not be privatised and voicing concern that the selloff "would add to the costs of Northern Irish businesses and consumers if the universal service obligation and uniform pricing are withdrawn."