Prime Minister Junichiro Koizumi has given up on eliminating a legal clause banning the privatization of the new public corporation slated to take over the government-run postal services in 2003, posts minister Toranosuke Katayama said Tuesday.

Koizumi, a strong advocate of the privatization of postal services, recently informed the ministry that he now feels "it doesn't matter if the clause exists or not," Katayama said.

The law was passed by the Diet in June 1998 to reorganize the then 22 national government offices into 13 entities.