Buckingham Palace is in discussions with Government over the future use of the Royal Mail name once the body is privatised, postal affairs minister Ed Davey said.
Any buyer would wish to continue using the name, Mr Davey suggested, but "safeguards" were being identified to guard against "misuse" of the Royal title.
The measures would ensure Royal associations were used "respectfully and appropriately" - and that they could be stripped away if necessary.
Last month the Government announced it would press ahead with controversial plans to sell off up to 90% of Royal Mail, with 10% of the shares in the privatised firm set aside for its workforce.
Union leaders are opposed to the move, which could see Royal Mail fall into foreign ownership.
The Postal Services Bill paving the way for the sell-off is due for second reading debate in the Commons on Wednesday.
In a written Commons answer to Tory Roger Gale (North Thanet), Lib Dem minister Mr Davey said: "The Government believes that Royal Mail should continue to retain its name and other Royal associations as it will continue to be the provider of the universal postal service throughout the UK.
"We appreciate that there may be concerns about the potential for misuse of these associations in the future, so we propose to put in place safeguards to ensure that they are used respectfully and appropriately at all times and that mechanisms exist to remove these privileges if necessary.
"The Government is discussing these matters with the Palace."
In a separate answer to Tory Penny Mordaunt, Mr Davey added: "The Government considers that any buyer of Royal Mail, for commercial reasons and in recognition of the company's heritage, would wish to continue to use the name without the need for any conditions to be placed on them."
