Country dwellers will pay �1.25 to use a Post Office cash machine service which urban customers will be able use for free, mail firm Consignia has admitted.

Consignia has said that of 4,000 cash machines installed at UK Post Offices by the end of this year, the 800 pay-to-use units will be sited mainly in rural areas.

The move will be seen by countryside campaigners as a further blow to outlying communities which have already suffered bank and store closures amid a slowdown in the rural economy.

But Consignia said that, without the charge, the cost of bringing cash machines - also called ATMs - to rural communities would be too high to make it worthwhile.

"It's a choice for customers whether they want to use an ATM with a small charge or whether they don't want to use one," a Consignia spokeswoman said.

"The economic reality is that it's a choice of having one there that charges and not having one there at all."

'Convenience fee'

All Post Office cash machines installed by building society Nationwide and bank HBOS will be free.

But ATMs put in by Alliance & Leicester will charge a fee in some areas to people who do not bank with the group.

All machines installed by Euronet Worldwide and Hanco charge a �1.25 "convenience fee".

Watchdog concerns

Postal watchdog Postwatch said it found the charges "understandable and regrettable".

"We would rather see the service available at no cost to the consumer, and in a good many cases that is the case," a spokeswoman said.

"However we do accept that... where footfall is low the service provider needs to get some costs covered."