A clutch of the world's most powerful sovereign wealth funds are expected to be allocated millions of pounds-worth of shares in Royal Mail even as thousands of British investors are frozen out of the privatisation.
Sky News can reveal that state-backed entities from Kuwait and Singapore are among those which ordered shares worth hundreds of millions of pounds as part of the postal operator's sell-off.
The Kuwait Investment Office, the City-based branch of the Gulf state's sovereign fund, and the Government Investment Corporation (GIC) of Singapore are expected to have their share applications scaled back because of the huge demand for Royal Mail stock.
Sources close to the privatisation said, however, that the two funds were expected to be allocated some shares because of ministers' desire to see Royal Mail have a geographically-diverse investor base when it moves into private ownership.
That decision may prove to be contentious because some British private investors are likely to be excluded because they placed orders for more than £10,000-worth of Royal Mail shares.
Ministers are expected to argue that those who placed orders for more than £10,000 were professional rather than private investors, although observers pointed out that many of them - understood to number in the handful of thousands - were likely to be core Conservative voters.
"They're taking a big risk given that there is a sufficient retail allocation to give all 700,000 people who applied the basic £750," said one.
Insiders said the Government would give those who applied for the minimum £750 of shares their full entitlement, but would scale back the allocation to those who ordered between £750 and £10,000.
Final decisions about the allocation of stock will be made until later on Thursday, with a Government announcement likely later in the day or on Friday morning before conditional trading in the shares gets under way.
The presence of sovereign wealth funds on the new share register of Royal Mail will reflect the diverse geographical ownership of most publicly-quoted blue-chip UK companies.
Sky News revealed earlier this week that there had been more than £30bn of orders by institutional investors for the available shares.
Roughly 150,000 Royal Mail employees will be handed 10% of the company, equivalent to a stake worth £330m at the sale price of 330p-per-share.
The Department for Business, Innovation and Skills and Royal Mail declined to comment.