Royal Mint unions said it was a victory for common sense

The move by the Government will mean that the Mint, which makes the nation's coins, will be able to expand into jewellery manufacturing and other non-coinage business.

It will also be able to licence its brand name, as well as entering into joint ventures with private companies or overseas government organisations.

Treasury officials said that the government had an "open mind" on whether the Mint, based at Llantrisant in Wales, could eventually be privatised.

BBC Economics Correspondent Ed Crooks: "The Treasury say the Mint could be privitised in a few years"

A spokesman said: "The new arrangements are very desirable and if you did want to privatise it - the government has an open mind about that - they would be very beneficial."

Beating the opposition

Economic Secretary Patricia Hewitt said the changes would enable the Mint to go out and win more business.

She added: "These measures will enable the Royal Mint to update the way it is run into today's modern commercial and business world and make it fit for the 21st century.

Patricia Hewitt: The Royal Mint must evolve to stay ahead of the competition

"It will also ensure that the Royal Mint makes the best possible use of the opportunities it faces.

"That includes the ability to offer an extended range of goods and services and to make fuller use of its expertise and capacity.

"The world coinage market is increasingly competitive.

"The Royal Mint must be ahead and stay ahead of the game if it is to thrive. We cannot stand still if we want to maintain its position at the forefront in the global marketplace."

The new framework for the Mint includes the formation of a panel of top private sector analysts and managers to advise the treasury which is the Mint's controlling shareholder.

The number of non-executive directors will also be increased and their roles clarified bringing them into line with private sector practice.

'Public sector success story'

The union representing most Royal Mint workers welcomed the announcement.