Czech billionaire Daniel Křetínský has overcome a major hurdle in his bid to take over Royal Mail after the government approved the deal.

Business secretary Jonathan Reynolds said it had received legally binding commitments from the bidder, known as the Czech Sphinx, and his EP Group that were intended to secure the long-term future of the postal service.

“For too many years progress on securing a stable future at Royal Mail has stalled, but from day one we have been committed to providing a secure future for thousands of workers and customers,” Reynolds said. “I’d like to thank EP Group and Daniel Křetínský for their constructive approach to our discussions and their commitment to protecting this national icon.”

Part of the negotiation included a commitment that, with very limited exceptions, Royal Mail’s HQ cannot be moved abroad and the group cannot change where it pays its taxes.

EP Group also committed to honour any new agreements entered into with the postal unions, recognising that workers should be placed at the heart of the company.

Křetínský said: “EP Group is very pleased to have reached this historic agreement with the Business Secretary to safeguard the future of Royal Mail, under EP Group ownership.

“We would like to thank the Business Secretary for the constructive negotiations that have resulted in unprecedented commitments and undertakings that demonstrate the high regard EP Group has for Royal Mail as an institution, the service it provides to millions of UK homes and businesses, and Royal Mail employees.”

The Unite union gave a cautious welcome to the news:

“This agreement opens the door to a better future for Royal Mail and its workforce,” said general secretary Sharon Graham.