Post offices in Wales are to be given a �49m lifeline by the UK Government.

The money, announced by the Wales Office on Monday, forms part of a �450m UK-wide investment over the next three years, aimed at developing new services and reducing the threat of closures.

One in three urban post offices are to close

Wales has almost 1,000 post offices in rural areas, but their numbers have been declining, partly because Westminster wants pensions and benefits to be paid into bank accounts rather than collected over the counter.

However, ministers recognise that post offices are often the village shop, the local community centre, the business exchange and the bank combined.

Wales Office Minister, Don Touhig, welcomed the largest state support package for rural post offices.

"This funding will help Wales's 950 rural post offices to continue to provide access to services in rural areas.

'Multi-purpose'

"It will also give Post Office Ltd the financial freedom to pilot new and innovative ways to provide postal services in rural areas.

"The heart of many rural Welsh communities is the post office. They are much more than simply providers of mail services.

"In many places the post office is also the village shop, the local community centre, the business exchange and the bank.

"This funding will help ensure post offices continue to play a vital role across Wales."

Safeguard

The Secretary of State for Trade and Industry, Patricia Hewitt, said: "This multi-million pound package shows our commitment to the rural post office network in Wales.

"The money will help to ensure that the village post office remains firmly at the centre of the community."

In October, MPs backed the proposed closure of up to 3,000 urban post offices.

The government plans to make �210m available to compensate sub postmasters for the cost of closures, and to improve the remaining post offices.

Untouched

The investment has been cleared under European state aid rules but still requires the approval of Parliament.

The plans mean that about one in three urban post offices will be closed - with rural post offices remaining untouched.

Ministers have argued that even after the closures, 95% of the UK population will live within a mile of a post office.

The consumer group Postwatch said it accepted there were too many urban post offices competing for customers.

But it said there should be full consultation with communities on individual closure decisions.