PLANS to give financial support to threatened local post offices have an excellent chance of being approved by European Union officials, claims a Lancashire Euro MP.

Liberal Democrat Euro MP Chris Davies accused the Government of creating a major problem by insisting that social security payments should be paid directly into bank accounts instead of handed over the counter -- a move which could sound the death knell for many small post offices across the country.

However the Post Office is expected to announce details this week of its scheme for a "universal bank" which, says Mr Davies, could get the go-ahead in Brussels.

Mr Davies said: "It is a matter of stressing the important role of post offices in communities where they are sometimes the only shop or facility for miles around.

"If Britain wanted to pay subsidies to local post offices to help them compete commercially and unfairly with high street banks, that would be against common market rules which we helped to write.

"But giving support for a social service intended to help local communities and the poor is a different matter altogether."