POST offices have recently gone through a massive cull, with almost 50 branches shutting down across York and North Yorkshire.

But now subpostmasters are warning of a fresh threat to many more offices in the area if the Government awards a massive pensions and benefits contracts to one of Post Office Ltd's rivals.

Geoff Simpson, the regional spokesman for the National Federation of SubPostmasters, warned the network faced a "catastrophic" decline unless the Post Office card account contract was awarded to Post Office Ltd.

He said the card account was worth £200 million a year to the firm, and up to 12 per cent of subpostmasters' pay, and there could be 3,000 closures nationwide, many of them in York and North Yorkshire.

"It's particularly important to the city post offices, where many people use their local post office branch for benefits and pensions," he said, speaking to The Press from the federation's annual conference in Torquay.

Mr Simpson, who is the subpostmaster of Helmsley Post Office, said the card account was used by four million people every week to access pensions and benefits, and a decision on who had won the tender for the new contract would be made by the Department of Work and Pensions (DWP) in the summer.

The Government had an opportunity to show the country it was "absolutely serious about making sure the 11,500 offices left have a future" by awarding it the POCA2 contract.

He claimed it was the "economics of the madhouse" for one Government department to consider taking the contract away while another department was paying the Post Office £150 million a year to support unprofitable post offices.

Post Offices Minister Pat MacFadden told conference delegates that while Post Office Ltd was in a strong position to win the contract, he was unable to announce a decision, which would be taken by the DWP and announced later this year.

York MP Hugh Bayley, who succeeded in helping to save a post office in Micklegate - said today it was essential for Post Office Ltd to put together a competitive bid if it wanted to win the contract.

He said it was important for the Government to recognise that post offices provided an important social service as well as a commercial one.

At the same time, if customers wanted to keep their local branch, they should use them as much as possible, for example by taxing their vehicle there instead of online, and buying their stamps there.