The post office in St Helen Auckland, near Bishop Auckland, will close on June 16, it was announced yesterday.

The closure is part of changes by Post Office Ltd to safeguard urban branches.

It follows an announcement last autumn by Post Office Ltd that it intended to undertake a restructure and modernisation programme.

At the time it said there were too many outlets competing for too little business.

The company also said that increased running costs and concerns about future income would leave many subpostmasters without viable businesses unless changes were made.

Government proposals to begin paying benefits directly into customers' bank accounts this year is one of the changes which is likely to have a big impact.

Last year, subpostmasters across the country were asked whether they wished to stay on in the business. After consultation it was agreed with the subpostmaster at St Helen Auckland that the branch should close.

David Mellows-Facer, Head of Area for Post Office Ltd, said: "Proposals to close post office branches are not made without considerable research and discussion.

"We received few comments about the proposal to close St Helen Auckland post office branch and following this exercise we believe that the closure of this branch is the correct course of action.''

It is believed that concerns about the pending closure were expressed by the village's residents' association.

However, Post Office Ltd said that customers in the area will continue to have reasonable access to local post office products and services.

Mr Mellows-Facer said: "We remain confident that the closure will improve the long-term prospects of the other branches in the area.

"In particular, we have made sure that the Tindale Crescent post office and the West Auckland branch are ready to cope with the extra customers they are likely to receive.''