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

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

This programme is vital to ensure that the post office can maintain an effective network

Stephen Timms, trade minister

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.

A government plan to support rural post offices to the tune of �150m per year is expected to be unveiled within weeks.

Public consultation

Trade Minister Stephen Timms told MPs on Tuesday evening that there was simply not enough business to sustain the present network of 9,000 local post office branches.

Consignia chairman Allan Leighton needs to cut huge losses

But he assured concerned Labour backbenchers there would be a full public consultation on every proposed closure.

There would also be measures to protect the country's most deprived areas, he said.

"This programme is vital to ensure that the post office can maintain an effective network, to ensure that the network can offer attractive prospects to sub-postmasters and to improve services for customers.

"We need to take this opportunity to set urban post offices firmly on the path towards sustained viability which is the key to enabling them to offer improved services for their customers from better, more convenient and more accessible locations".

Strike ballot

The closures are designed to help Consignia - which is currently losing �1.2m a day - cut its huge debts.

The debate came a day after a ballot began of 3,000 postal workers, on strike action over plans to privatise their jobs.

The cash handlers - who distribute money and stamps to post offices - are angry at plans by Consignia to sell the service to Securicor.

The Communications Workers Union said voting would begin at the end of the month, and workers could go on strike in the run-up to Christmas.