Thousands more post offices face closure if Royal Mail loses the battle to retain the Post Office card account which pays out pensions and benefits to 4.5m people, the National Federation of Sub-Postmasters has warned.

In a letter to the prime minister, George Thomson, chairman, said sub-postmasters were becoming increasingly concerned about the government's delay in awarding the contract to run the successor to the present Poca scheme, which ends in 2010. The typical sub-postmaster earns about 10 per cent of their post office income directly from card account transactions - more in deprived areas. "The prospect of 3,000 more branches closing in chaotic fashion is appalling," Mr Thomson said. "These closures would be the result of sub-postmasters facing bankruptcy because of the fall in revenue from the loss of the Poca . . . when business costs are already rising dramatically."