Some 557 post offices are at risk of closure if the government continues to move to electronic payments. That is the warning from the Irish Postmasters Union who say that even though they have the welfare contract they are losing the welfare business.

They say they are also at risk from the new 'Post and Pay' partnership An Post has with Tesco, saying it could destroy the network in two years.

A report commissioned by the Irish Postmasters Union from Grant Thornton has found that by 2017 there would be a decline of 48% in the post office network.

It believes that urban and rural communities would be hit by the closures that would follow the loss of the social welfare contract.

The network is currently made up of 1,150 Post Offices

It also found that where direct electronic payments are introduced and 75% of payments are done without the involvement of the network, 444 Post Offices would be lost by 2017.

The two-year social welfare contract is currently held by An Post with possible extensions for up to four additional years. Grant Thornton concluded that government additional business through the Post Office is necessary to help sustain the network.

They found that if motor tax renewals were available in Post Offices, it would save the exchequer €60.6 million over a five year period.

But Grant Thornton concluded that the additional business alone would not compensate for the loss of the welfare payments.

General-Secretary of the Irish Postmasters Union Brian McGann is calling on the government to keep their promise to save the network.