Trade and Industry secretary Alistair Darling said that closures were needed to reflect the fewer number of people regularly using the Post Office and the losses the network continued to make. Last year it lost £2 million every week, rising this year to £4 million. The network currently receives an annual subsidy of £150m.

Alongside the announcement of closures, the Government committed itself to an investment package worth up to £1.7 billion for the Post Office. Mr Darling proposed setting up 500 outlets for small, remote communities such as mobile post offices and services based in village halls, community centres and pubs. Other plans include support to enable the Post Office to expand financial services for customers, continuing the annual subsidy until at least 2011, and the creation of “new access criteria”.

Mr Darling said: “The Post Office provides an important social and economic role, particularly for our rural communities and deprived urban areas. Piecemeal closures are no good for anyone. The Post Office must plan a proper national network.”

“Post offices face a long-term challenge,” he continued, “internet, e-mail and text-messaging have meant that people, young and old alike, increasingly use the phone or internet banking, cash point machines or direct debits to pay their bills.”

Chairman of the Commission and the Rural Advocate Dr Stuart Burgess said, ‘Despite the Government”s continuing commitment to maintaining the rural post office network, we are seriously concerned about the impact of the likely level of closures on rural communities and rural business, and, in particular, the effects on the most vulnerable people – the elderly, disabled and low-income families.’

The Countryside Alliance says the Government is ‘missing the point’. “The rural sub-Post Office network has become increasingly uneconomic exactly because of the policies of this Government. It should now be looking at how to increase viability whilst maintaining the vital social lifeline the network provides to thousands of communities.

“These plans give us a glimpse of a chilling future where broadband takes over from human interaction and communities become service-free dormitories with no heart. A mobile Post Office can never be the centre of village life.”

A consultation seeking views on the Government’s proposals opens today, with the last date for responses being 8 March 2007.