LIBERAL Democrat AM Mike German claims Consignia plans to close hundreds of "vital" post offices in Wales, and that taxpayers will lose out twice as a result.

Mr German, AM for South Wales East, claims the Welsh Lib Dems received a leaked memo from Consignia - formerly the Post Office - revealing that 3,000 of the total 8,500 urban offices were set to close.

He claimed: "The memo states that the UK government is handing £180,000 to Consignia as an incentive to close 3,000 urban post offices across the UK, many of these in Wales. This means the taxpayer is losing out doubly, as they have to foot the bill to slash a service to themselves."

The move was suggested in a government report two years ago which revealed there were too many urban post offices competing with each other.

It was also put down to the expected 50% loss of business with the introduction of Automatic Credit Transfer for pensions and benefits payments in April next year.

A spokeswoman for Consignia - which became the new name for the Post Office last year - told the Argus the amount pledged by the government was actually £270million, subject to EU state aid clearance and Parliamentary approval, to pay compensation to the subpostmasters who would lose out.

She said: "There is not hit list of post offices set to close. We have sent letters to subpostmasters asking those in urban post offices to complete a questionnaire detailing whether they would be prepared to close their branch. It is a form of consultation and we are waiting for the results of that."

The spokeswoman added that they were working very closely with the Federation of Subpostmasters, who fully supported the plans.

But, as the Liberal Democrats launched a 'Don't KO the PO' campaign to save Wales' 1,400 post offices, Mr German added: "The Welsh Liberal Democrats believe that post offices provide a vital service to Welsh communities and should not be open to the kind of destructive competition recommended by the postal communications watchdog or the massive cutbacks encouraged by the New Labour government in Westminster."