The public will be able to open current accounts at post offices for the first time under plans being pushed by the government.
Negotiations are taking place between the Post Office and Bank of Ireland - which already provides savings accounts for the service - to offer current accounts.
The deal has not yet been sealed, given the large investment which would be needed to set up the service. "You need to make sure the technology and capability is in place," said one source close to the talks.
But ministers have given their strong backing to the plan, which they believe could help revive the ailing network. The move would be the latest step in the rapid expansion of financial products by the Post Office, which opened its first "instant saver" account less than three years ago.
Though it has long been a major provider of foreign exchange services, the Post Office has only more recently branched into wider products such as credit cards, home and travel insurance, bonds and ISAs. An estimated 1.8m people use these services every year.
This autumn the Post Office's savings accounts saw huge inflows after the Irish government guaranteed deposits at all Irish banks. Since then, however, British ministers have effectively guaranteed savings at UK banks.
News of the talks comes just days after Lord Mandelson suggested that the post office network could provide a wider range of financial services to its customers. The new business secretary suggested that the organisation could use its reputation as a "trusted institution" to widen the number of products it offered. It emerged that Lord Mandelson had written to Gordon Brown: "We should examine the prospects for POL [Post Office Ltd] becoming a much more significant player in financial services - offering a wider range of attractive products within easy reach of the whole population."
Having overseen the closure of 2,500 post offices - with more anticipated in the medium term - the government is keen to show its support for the group. Hundreds of Labour MPs have been involved in a campaign to save branches from closure.
