LONDON, May 23 Reuters Britain39;s finance ministry said it was working through internal due process when asked to clarify the possible impact of a July 4 election on the government39;s proposed retail offer in NatWest, a spokesperson told Reuters in an emailed statement on Thursday.

The heavilyanticipated stock sale, a key milestone in the full privatisation of the taxpayerbacked bank, is hanging in the balance after Prime Minister Rishi Sunak said on Wednesday Britain would be heading to the polls in less than two months.

Shares in the lender, which have gained more than 40 this year to date, were trading 2 lower at 1002 GMT, as investors waited for official confirmation that the proposed offer would be mothballed.

Chancellor Jeremy Hunt and UK Government Investments, the agency that manages Britain39;s holding in NatWest, were planning the sale to jumpstart ambitions to promote wider retail ownership of UK stocks.

But the imminent election places the decision on how to offload the taxpayer39;s remaining shares in NatWest in the hands of the next government, sources told Reuters on Wednesday.

Analysts at Peel Hunt said the sale could not take place before an election and it was also unclear whether the Labour Party, which is hotly tipped to lead the next government, would proceed with the initiative.

Although the UK Government is a passive investor only in NatWest, the presence of the State on the share register in our view is not helpful for the rating of…