The government is set to confirm its plans for the future of the Post Office, including how many branches it expects will have to close.
About 2,500 post offices are expected to close because of rising losses and fewer people using the network, the government has announced.
Trade and Industry Secretary Alistair Darling will reveal the level of grant it will give to subsidise the running of rural post offices.
Trade and Industry Secretary Alistair Darling told MPs that the cuts were needed because of losses of £4m a week, twice as much as in the previous year.
It is thought the new funding package will result in the closure of up to 3,000 offices.
He also announced a five-year investment package of £1.7bn and local consultations on restructuring plans.
The Royal Mail currently receives £150m a year in a deal which expires in 2008.
The Conservative Party said ministers had failed to have a long-term vision.
The Royal Mail has said the size of the network depended on the level of government funding it receives.
As part of the restructuring, Mr Darling proposed setting up 500 outlets for small, remote communities such as mobile post offices and services based in village halls, community centres and pubs.
Losing business
The consultation will seek views on the proposals until 8 March 2007.
The Department of Trade and Industry has described the current size of the network of 14,000 post offices as "unsustainable".
Mr Darling said the post office had an important social and economic role.
Mr Darling said the Post Office was serving four million fewer customers than two years ago and was losing £4m a week, twice as much as in the previous year.
Our strategy aims to protect the national network, equipping it to meet the challenge of today Alistair Darling MP,Trade and Industry Secretary
He said there was a need to strike a sensible balance between closing those branches with too few customers and providing a national network of post offices.
"Piecemeal closures are no good for anyone. The Post Office must plan a proper national network.
"We need to deal with that but we do need to ensure we have a national network because we recognise the importance of the Post Office to people the length and breadth of the country," he said.
"Post offices face a long-term challenge. Internet, email and text-messaging have meant that people, young and old alike, increasingly use the phone or internet banking, cash point machines or direct debits to pay their bills.
Post offices were hit after the decision to pay pension and child benefit directly into bank accounts.
"People are increasingly choosing to access services in different ways, resulting in some four million fewer people using their post office each week than two years ago.
"Our strategy aims to protect the national network, equipping it to meet the challenge of today."
Mr Darling said the annual £150m subsidy to help rural branches stay open will be extended beyond 2008 until 2011.
"Nearly 99% will be within three miles of a post office," he said.
There was widespread recognition that the current size of the network of 14,000 post offices is "unsustainable", he said.
Post offices have been affected by the decision to pay pension and child benefit directly into bank accounts.
TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.
TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.
Compensation
The BBC learned at the weekend that between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after the government announcement.
It is understood there will be compensation packages of £40,000 to £70,000 for sub-postmasters.
General Secretary of the Federation of Sub-postmasters, Colin Baker, said his members provided a social service which was dearly loved.
He accepted there was a financial case, insisting talks were needed on how to create a sustainable network for the future.
"The government have had that viewpoint recently that they can do without the Post Office which I think the nation this year has told them in resounding terms, that they can't."
You cannot carry on putting a massive amount of public subsidy into this Prime Minister Tony Blair
Speaking earlier this week, Prime Minister Tony Blair said: "You cannot carry on putting a massive amount of public subsidy into this.
"Now we will look for ways in which we hopefully can stabilise the situation, and give the majority of post offices a way forward for the future."
The reason why post offices have continued to close is because people have made an individual choice to transact their business differently, he said.
Campaigners say thousands of elderly people across the country are worried about the closures.
Age Concern's director general Gordon Lishman said: "It's time the government started listening to the people who use and depend on their post office."
The Federation of Small Businesses urged the Secretary of State to rethink his plans and to delay closures to give small firms time to alter their ways of working.
Sandy Bruce Lockhart, chair of the Local Government Association, said it was determined to make sure local people suffered as little as possible and that essential products continued to be delivered.
A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.
