The charge, which will apply to the Abbey's 800 branches, will be introduced in August.

The bank said in a statement it wanted to encourage customers to pay their utility bills and other third party bills by telephone, post, direct debit or cash machine rather than at branch counters.

"We don't want customers to pay this charge - it is designed to encourage them to use the other methods, which are free of charge," it said.

"These will allow customers to conduct such transactions more quickly and easily, and at the same time allow us to reduce queues in branches."

However, the move was criticised by consumer groups for its effect on less affluent groups, like many pensioners or unemployed people, who tend to rely more on cash transactions.

The Abbey said the move was aimed at making the most of automated methods of bill paying and reducing queues. It said it would not lead to branch closures or job losses.