The Government has secured the future of the Post Office under a 10-year deal giving certainty to postmasters, ministers have announced.
The long-term arrangements between the Post Office and the Royal Mail will be reached before the two are separated under the Government's controversial privatisation plans.
Sub-postmasters welcomed the move but the Communication Workers Union said it was the end of an era for a fully publicly-owned postal service.
Postal Affairs Minister Edward Davey said: "Concerns people had about the Post Office becoming independent from Royal Mail were always misplaced as that separation is part of our cure, but the 10-year deal struck between Royal Mail and the Post Office will give sub-postmasters and others greater confidence.
"Coupled with winning new contracts and the successful pilots of new operating models, the signs are extremely encouraging for the future of the Post Office."
Moya Greene, Royal Mail Group's chief executive, said: "I am delighted with this agreement. It provides a firm foundation for the Post Office's long-term, sustainable future and ensures Royal Mail's customers continue to get access to postal services in Post Office branches nationwide, the UK's biggest retail network."
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Paula Vennells, managing director of Post Office Ltd, said: "This is a good agreement for the Post Office, for the millions of customers a day who visit our branches and for our sub-postmasters. We are the number one mails retailer in the UK and postal business accounts for a third of our income.
"A long-term relationship with Royal Mail ensures we continue to provide the unrivalled access and great customer service in mails and parcels services, which individuals and business customers want from the Post Office."
National Federation of SubPostmasters (NFSP) general secretary George Thomson said: "Sub-postmasters will welcome the security which this news brings, which will help provide them with the confidence necessary to invest in their businesses for the future.
"The NFSP has been calling for a minimum 10-year inter-business agreement since plans for Royal Mail privatisation and the separation of the two companies were announced, and we have worked tirelessly to achieve it. Without this deal, sub-postmasters would have faced even greater difficulties in running their businesses and continuing to provide vital services to their communities."
© 2012 Press Association