A POST office outreach service used by residents of two remote villages has been closed without warning following the resignation of the subpostmaster running the services, after an eight-month dispute with Post Office Ltd.

The villages of Swainby and Osmotherly lost their permanent post offices in June 2008 and were supplied two half days and three half days a week respectively by the outreach service, run from the village halls.

Locals say the services in the villages were well used and relied on by elderly residents, many of whom have their pensions made out in the name of either post office, and which cannot be cashed anywhere else.

Some pensioners have now gone three weeks without receiving any money and many more are struggling to make the 10-mile round trip to Stokesley, the nearest branch, by bus.

The dispute centred on the refusal of subpostmaster Bob Chaytor, who runs Romanby Post Office, to sign a contract to take over the outreach service put forward by the Post Office, which he felt unfairly tied him permanently to the outreach services and restricted his ability to run Romanby Post Office properly.

The contract that Mr Chaytor refused to sign includes a controversial amendment that states a subpostmaster who takes on an outreach service cannot stop servicing it unless he also leaves his core post office.

After eight months of running the outreach services on a caretaker basis, and without signing a contract, Mr Chaytor pulled out of Swainby and Osmotherly when the Post Office failed to find someone to take over by the deadline he had put forward.

Mr Chaytor expressed his regret at having to resign from the outreach service.

"Throughout all this my main concern has been that the people of Swainby and Osmotherly got the service they deserve and that is why I stuck around for as long as I did.

"The service simply doesn’t make enough money for me to take the business risk to tie myself to it and risk my core post office suffering too. It takes a lot of time and effort to run the outreach services, which something I just don’t have anymore."

Anthea Massingham, former vice-chairwoman of Swainby Parish Council and a resident of the village, is concerned about the loss of the service.

"A lot of elderly people are in dire straits without a post office," she said, "They are having to rely on lifts or other people to collect their money for them, which isn’t ideal."

A Post Office Ltd spokesman said: "Swainby and Osmotherly outreach Post Office service has closed temporarily following the resignation of the core subpostmaster. We apologise to our customers for any inconvenience caused and can assure them that we are committed to restoring a service to the village as soon as possible."