HUNDREDS more post offices across Lancashire could close if a contract described as the "cornerstone of the entire network" is lost to a private company, it has been warned.

Postmasters are warning that even branches spared the axe from the recent closure programme may not be able to survive if they lose the right to pay people's benefits.

At the moment this is done through the Post Office Card system, but the contract to provide the service expires in 2010.

The government is considering bids to provide the service from Post Office Ltd and other companies.

And Bill Aspin, who runs the West End branch, Blackburn Road, Oswaldtwistle, said he feared the worst if it went elsewhere.

If it does, a £150million government subsidy that is keeping some loss-making branches open could be lost.

Mr Aspin said: "It won't just affect this branch it will affect the whole network.

"This is worse than any closure programme. It's the cornerstone of the entire network.

"We would just go if it goes. Without the footfall it generates we would not sell any sundries. I am not saying it's a saviour of the post office, but you need something to build on.

"It shouldn't be a case of giving it to the cheapest person, they should take into account the effect on communities."

Mr Aspin is gathering signatures to support a campaign by the National Federation of Subpostmasters to keep the service with the post office. He said the amount of government services provided through post offices had decreased since 1997, but post office cards still brought him two thirds of his business.

Hyndburn and Haslingden MP Greg Pope said he planned to sign an early day motion calling for the service to be awarded to the post office.

Mr Pope said: "No doubt if this contract is not given to Post Office Ltd more branches would close as a consequence."

As a result of the recent closure programme, 24 post offices across East Lancashire are shutting, despite fierce opposition.

The Lancashire Telegraph had run a Save Our Post Office Campaign and we handed over petitions with 1,500 signatures.