A further 3,000 post offices could be forced to close if the Government fails to continue allowing benefits and pensions to be paid over the counter, sub-postmasters have warned.
The National Federation of Sub-postmasters (NFSP) has issued the warning ahead of its annual conference tomorrow.
The contract, which currently provides post offices with a vital £200m worth of income, is up for tender and general secretary of the NFSP, George Thomson, told the BBC losing it would be a "disaster".
Mr Thomson said four million customers a week currently collected their benefits or pensions from the Post Office and the lost income would lead to further closures.
Mr Thomson said: "It would be an absolute disaster for the British post office network, and for the public and post-masters."
Plans to close 2,500 post offices across the country is already under way with only seven of the 169 earmarked for closure in London being rescued, including the branch at Kingston Road, Wimbledon.
However, after a six-week consultation, Post Office Ltd announced that 36 branches across south-west London on its closure list will start shutting down from next month.
Those branches include six in Wandsworth, six in Kingston and seven in Merton.
Kingston and Surbiton MP Ed Davey has condemned the closures as a "massacre".
"They are pressing ahead not just in the face of our united opposition, but also of our strong and valid arguments, he said."
- How would further closures affect you?
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