The Government is providing the Royal Mail with £1.3 billion for a “radical transformation”, and Adam Crozier, its chief executive, said that the current situation — where a thousand post offices have fewer than six customers a day — was “not sustainable”.

He said: “It’s clear that it can’t continue the way it is. The status quo is not possible.”

More than 6,000 of the 8,000 rural post offices are understood to be losing money. The whole network, which has 14,500 branches, loses £2 million a week. Mr Crozier has said that he can meet his legal obligations with a network of just 4,000 offices.

The Conservatives said that the Government must establish a long-term strategy for the Post Office, its role and how it should be supported. Charles Hendry, Tory trade and industry spokesman, said that without such a strategy “there will be catastrophe for the rural post offices”. He said that new business opportunities had to be explored, including a wider range of mail deliveries.

Post offices have been severely undermined by the Government’s move to pay benefits directly into bank accounts. Ministers have already announced that they are withdrawing support for the Post Office card account, a way of allowing pensioners and other benefits recipients to continue collecting their money from post offices. This will end by 2010, when the Government will account for less than 10 per cent of post office transactions.

Consultation has begun on how many rural post offices there should be, but the National Federation of SubPostmasters fears that thousands will have to close. The network currently depends upon £150 million a year of support from the Government, which is scheduled to end in March 2008.

The £1.3 billion package was announced as part of a total £3 billion government loan package to help to modernise Royal Mail and plug a £5.6 billion black hole in its pension fund.But ministers were accused of failing to understand the needs of rural communites, where the village post office is often at the heart of local life.

Arthur and Penny Robinson have run a sub-post office and stores in Erwood, Powys for 23 years. The village has a population of about 150 and the post office receives between 10 and 15 customers most days, Mr Robinson, 78, said. “Thursdays are the exception when everyone comes down from the hills to do their shopping and draw their pensions. It gets mad then. We get 20 or 25 people in.”

They are open from 9am to 1pm six days a week and cannot imagine closing. “Our customers wouldn’t let us. We’re the last shop in the area. I’m also the last vestige of civil authority in the area. We haven’t had a policeman for years and people depend on the postmaster for traditional tasks like signing shotgun certificates and driving licences.”

He added: “People in the village are very aware that if they don’t support us there won’t be a post office or stores any more.”

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