Subpostmasters have welcomed the European Commission’s authorisation of £180m public assistance to the Post Office network to help it continue to provide “public service tasks”.

Commission vice president in charge of competition policy, Joaquin Almunia, said the funding would sustain the network for another year. “The aid will enable the UK post office network to continue performing its fundamental social and economic role and important public service tasks, without duly distorting competition.”

A spokesman for the National Federation of SubPostmasters said: “We welcome the European Commission’s approval of government funding for Post Office Ltd (POL), which is vital to help maintain a national network of 12,000 post offices in communities across the entire country.”

The proposed measures would prolong the Network Subsidy Payment to keep open unprofitable stores in rural areas and the Working Capital Facility which enables POL to hold enough cash to carry out its public service obligations until March 2012. 

The current authorisation of these measures expired on March 31 of this year. The extension was deemed necessary by the European Commission for POL to continue carrying out services of general economic interest entrusted to it by the UK government.