Royal Mail should keep the Post Office Card Account
Alan Duncan, the shadow trade and industry secretary, says a Conservative Government would keep the contract with the Royal Mail.
Writing on the Daily Telegraphh website he says: "The Post Office Card Account is the lifeline keeping what is left of our post office network alive.
"If the Government pulls the plug and sends POCA business elsewhere, the whole network will be plunged into unmanageable chaos.
"Gordon Brown talks of being a friend to small firms, but it looks like his Government is prepared to drive a stake through the heart of Britain's most iconic form of small business.
"If he wants to see any future for post offices in Britain, he must award the POCA contract to Post Office Limited."
Post offices have declined in number by 40 per cent from 19,000 to just 11,500 since Labour came to power, Mr Duncan says, with rural communities hit hardest.
However Mr Duncan warns that "the worst may be yet to come" if Royal Mail loses the contract, making "previous cuts seem trivial in comparison".
The card account contract, worth £249 a month to the average post office, is vital to marginally profitable post offices which have seen revenues collapsed after losing the right to sell road tax and TV licences.
Mr Duncan says: "Without POCA, many post offices would find it impossible to survive."
There is a further risk, he says, that if the contract is taken away from the Royal Mail it could cause the "social" justification under European Union rules of network's £150million a year subsidy to be withdrawn.
"Electronic terminals in newsagents are no substitute for a local post office, and it would be absolutely false for the Government to pretend otherwise" he added.
The Local Government Association also said it would be campaigning to save post offices. In a letter to Lord Mandelson, LGA chairman Maragret Eaton said: "Councils are deeply concerned about the prospect of widespread post office closures if Royal Mail loses the Post Office Card Account contract.
"If the Government decides not to award the Post Office Card Account contract to Royal Mail, councils will campaign in force to ensure that government funds are made available so that post offices across the country are saved from closure."
A spokesman at the Department for Work and Pensions told the Telgraph that: “The contracting process remains underway. No decision has yet been made. An announcement on the outcome will be made as soon as possible.”