Commenting on the report from the National Audit Office showing that the future of post offices remains ‘uncertain’, Shadow Industry and Technology Minister, Michael Fabricant, said: "The NAO rightly points out the difficulty that the Post Office faces. In particular rural post offices cannot continue to receive a subsidy without reform. This is a view we share with the National Federation of Sub-Postmasters.

"A Conservative government would invest taxpayers’ money, not to subsidise loss making post offices, but to restructure them in a way that would make them viable in the long term. Labour plans at present would result in massive closures of rural post offices in 2008 when the Government subsidy runs out."

The NAO report states: "A significant number of rural post offices are not viable businesses and the rural network is heavily loss-making for Post Office Limited. The government is giving extra funding of up to £150 million a year, until 2007-08, to keep rural post offices open. The company has made slow progress in piloting alternative methods for providing post office services in rural areas; in 2003-04 only £777,000 was spent out of a potential budget of £5 million. If the Department is to have a sound assessment of the outcomes from the various pilot activities by the end of 2005, when it needs to start considering the future of the network beyond 2008, it needs to ensure that Post Office Limited adopts a more robust approach."