More inner city post offices in Birmingham could be forced to shut because of Government plans not to renew a £1 billion contract, a local councillor has warned.
Royal Mail is understood to have been told by the Department for Work and Pensions that it will not renew the Post Office account card contract when it expires in 2010.
More than four million people are paid pensions and benefits through the card.
Concerns have been raised that if benefit payments are made direct into bank accounts instead of post offices, local stores would be forced to close as less cash will be spent in them.
Coun Deirdre Alden (Con Edgbaston) said residents in Harborne are already fuming at the loss of three small post offices which has forced many pensioners to make long journeys to Harborne High Street.
She added: "People want to have these local facilities but the DWP does not have any thought for causing people to travel long distances. This proposal sounds the death knell for local centres."
Government Ministers were also accused by Tory MPs of inflicting "death by a thousand cuts" on post offices.
But Trade and Industry Secretary Alan Johnson said not a single rural post office had closed, unless it had been impossible to find a sub postmaster or venue for the post office.
A DWP spokesman said: "The Post Office card account will be funded by Government until 2010. It is one of 25 or so accounts that can be used to access benefit and pension money over the Post Office counter - 75 per cent of our customers already have benefits or pensions paid into a bank account." ..SUPL: