Campaigners celebrated yesterday after the government delivered some first-class news over Post Office service provision, ending the threat of further closures.

Campaigners celebrated yesterday after the government delivered some first-class news over Post Office service provision, ending the threat of further closures.

Westminster awarded the Post Office a contract to continue with a card account system used by millions of claimants to receive benefits and pensions.

Work and Pensions Secretary James Purnell told MPs the organisation would retain the business under a new contract running for five years from 2010, with the possibility of an extension beyond that, raising hopes of a brighter future for the service.

Around 2500 post offices across the country will have shut by the end of the year under a closure programme and there had been warnings that a further 6000 would be under threat if the Post Office Card Account went to a rival bidder such as PayPoint.

Mr Purnell said that in order to support a viable post office network, the competitive tendering process had been cancelled. He said: "Now is not the time for the government to do anything to put the network at risk, particularly as post offices are often the only providers of financial services in remote areas."

Around 4.3 million people hold a card account to obtain pensions and benefit payments including Jobseeker's Allowance and child benefit. Around £80m is paid out every day to account holders, with many of them spending some of the money in post offices or shops run by sub-postmasters. The card is responsible for one in four visits to post offices, rising to one in two in rural areas.

Alan Cook, managing director of the Post Office, said: "We very much welcome this decision, which enables us to achieve our goal of maintaining a branch network of around 11,500 outlets for the foreseeable future.

"We will, of course, also be working with other government departments to drive a wide range of services through the network, while at the same time building on our existing range of financial and other products."

Billy Hayes, general secretary of the Communication Workers Union, said the announcement was "a victory for common sense".

George Thomson, of the National Federation of Subpostmasters, said: "This decision must now mark an end to continued uncertainty surrounding the post office network's future. Sub- postmasters, and the post office network, cannot sustain the ongoing threats to vital services and further post office closures every two or three years."

Glasgow North-West Labour MP John Robertson said just under 13,000 people in his constituency used the card accounts and it had almost 90,000 customers Glasgow-wide. "This will be a welcome announcement for post offices in Glasgow."

Glasgow North Labour MP Ann McKechin said the future of the Post Office should "now be about getting on with the job of finding ways of developing the best services for communities".

SNP postal affairs spokesman Mike Weir MP said: "It is still not clear why we had to endure months of delay and confusion over the award of this vital contract."

David Mundell MP, shadow secretary of state for Scotland, said: "I am glad that this has been averted for the time being. However, the government deserves no congratulations for the worry that it has caused rural communities, vulnerable card account users and sub-postmasters and for way it has wasted taxpayer's money on a botched tendering process."

Shadow business secretary Alan Duncan MP described the move as "disarray dressed up as decision".

David Sinclair, of Help the Aged, said: "This decision, although welcome, will not stop the road of decline the Post Office is moving down. If we are to maintain what is an irreplaceable network, we need to invest in maximising its potential, not cutting back or simply sustaining how we use it now."

Martyn Evans, of Consumer Focus Scotland, said: "This is good news for all consumers, nowhere more so than those who live in remote rural areas."