RURAL post offices across the region could face a more certain future if the Government agrees to extend a £150m annual subsidy.

Ministers are expected to announce next month that they will extend the payment, which was due to run out in 2006, for another two years.

However, a North-East official for the National Federation of Sub-postmasters said the increase in subsidy will be of little benefit to rural post offices.

Eleven possible closures across the North-East were announced last week.

And without the social network payment, which started a year ago, The Royal Mail may have to close more of its 8,100 rural post offices, which lose about £140m a year.

The company, which recently reported its first profit in four years, is undertaking a renewal plan that includes the closure of urban post offices and the scrapping of second deliveries.

Anne Pratt, branch secretary for the North Yorkshire and South West Durham National Federation of Sub-postmasters, said that while the extended subsidy might be good news for Royal Mail, it would have little impact on rural sub-post offices.

Mrs Pratt, who runs a rural post office in Gainford, near Barnard Castle, County Durham, said: "I have to be honest, this means nothing.

"The money will go to a central pot which they will use to pay our wages. But it would be nice to see it filter down.

"I suppose it might help the Post Office to keep us up and running. In the past, they have done everything they can to stop rural post offices from closing."

Mrs Pratt said the threat to post offices, especially urban ones, was encouragement from the Government for people to have their pensions paid into bank accounts.

It is hoped the announcement of the subsidy will head off a political row ahead of the next General Election.

A Post Office spokesman said: "We are in ongoing discussions with the Department of Trade and Industry (DTI) about the arrangements beyond 2006.

"We are working hand-in-hand with them to secure a viable future.''

A DTI spokeswoman said the Government would take decisions on the shape of the rural post office network after 2006 "in good time to allow for a smooth transition from the current support network".