Anger at post office closure plan

Campaigners have fought to save rural post offices

There has been an angry reaction to reports that thousands of post offices are to be closed to save money.

Between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after a government announcement on Thursday, the BBC has learned.

National Pensioners Convention general secretary Joe Harris said it would be "devastating news".

Royal Mail said the size of the network - which is losing money - depended on the level of government funding.

The Department of Trade and Industry described the current size of the network of 14,000 post offices as "unsustainable".

The network is making huge losses, and is due to lose a £150m-a-year subsidy for rural post offices in 2008.

BBC business editor Robert Peston said the government had rejected more extensive closures, recognising the social role post offices played.

It is understood there will be compensation packages of £40,000 to £70,000 for subpostmasters.

There will also be subsidies for van-based mobile post offices, pubs, libraries and butchers in affected villages.

A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.

'Sustainable future'

Mr Harris said post offices were a "lifeline" for millions of older people.

Colin Baker, general secretary of the National Federation of Subpostmasters, said local post offices were struggling because more people were shopping on the internet and going to larger towns.

Post offices needed to introduce more modern products and services - as they had done with foreign currency and travel insurance - to keep them going, he added.

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Parliamentary all-party sub-post offices group chairman Kate Hoey said ministers had to find a way of generating new income for post offices.

"It's not going to be good enough for the government to come forward and simply say post offices aren't viable and we're going to allow thousands and thousands of them to close. I don't think they will do it," she said.

Marilyn Hirst, a subpostmistress in Stanley, West Yorkshire, told BBC News the closure of her branch would have a dramatic effect on the community.

POST OFFICES IN CRISIS Despite subsidies of £150m, post offices lost £111m in 2005 Postcomm estimates 1,500 of 8,000 rural post offices make money 72% of sub-postmasters are uncertain about the future, says Postcomm Revenue from services withdrawn from post offices fell £168m in past year

"The nearest post office is about a mile and a half away but there's no direct bus for the people that live in the sheltered housing, who rely on coming up here," she said.

Conservative MP Peter Luff, chairman of the Trade and Industry Select Committee, said wholesale closures were not necessary and ran "completely contrary to the interests not only of rural Britain but of deprived urban areas too".

Liberal Democrat trade and industry spokesman Edward Davey said: "These closures have been government-driven as ministers have taken away businesses like pensions, TV licences and passports."

In Scotland, the SNP has called on the Executive to demand that Westminster ensures a secure future for rural post offices.