In December 2006, Ministers announced there would be a successor to the POCA and the contract was put out to tender.

Today, the Work and Pensions Minister, James Purnell, told the Commons: "There is no doubt that the Post Office Card Account is central to maintaining a viable Post Office network. It not only generates a key part of the Post Office's income but also brings with it vital footfall to individual sub-postmasters."

Speaking from Westminster, the Pendle MP said: "This is absolutely the right decision. In Pendle 7,020 people have a Post Office Card Account and they don't need to be told how valuable and convenient it is."

"Given the huge financial turbulence over recent months, I want to see the trusted Post Office develop into a national bank."

The Post Office Card Account is a very straightforward account specifically designed to pay benefits administered by the Department for Work and Pensions, the Northern Ireland Social Security Agency, Service Personnel and Veterans Agency and Inland Revenue tax credits.

Only benefits and pensions can be paid in and they are collected across a post office counter using a plastic card and PIN.

About four million people receive their benefits and pensions this way, including around two million pensioners.

The National Federation of Sub Postmasters had claimed that 3,000 post offices might close if post office did not receive the contract.