The UK Government says post offices need new attractive products

They said benefits reforms posed an "apocalyptic threat" to post offices.

But they failed to get agreement in the Welsh assembly to make Labour reopen a fund giving post offices access to development money.

Assembly Social Justice Minister Edwina Hart said she would look at reopening the fund when a UK Government review of post offices had finished.

Although the Lib Dems won the support of the opposition parties in the assembly, Labour held on to its slim majority.

If we do not take action anywhere between 60% and 80% of our post offices could be closed by 2010 Mike German AM, Liberal Democrat

According to Lib Dems, more than 2,000 UK post offices have closed in four years, with the rate of decline most dramatic in rural areas of Wales.

Part of the motion passed in the assembly on Tuesday called on the assembly government to lobby its Westminster counterpart to retain the post office card account.

The Lib Dems had wanted the reopening of the Post Office Development Fund set up by the assembly government in 2002, when Labour and the Lib Dems were in coalition.

It helped post offices access up to �50,000 to renovate and diversify their businesses.

It provided �4.1 m for 106 post offices before it was closed in July 2004.

Labour said it also wanted to reopen the fund but it was waiting for the completion of a review.

An assembly government spokesman said an evaluation report of the impact of the fund was due to be published shortly.

Mike German, leader of the assembly Lib Dems, said: "Postmasters across Wales tell me their businesses are under threat as never before.

"Labour's reforms of the way benefits are paid - and in particular the scrapping of the post office card account - represent an apocalyptic threat to the post office network in Wales.

"If we do not take action anywhere between 60% and 80% of our post offices could be closed by 2010.

James Plaskitt, the UK housing benefit minister, said the card account scheme was always due to end in 2010, and had "very limited facilities".

He said post offices needed "new attractive products", and was working on alternative accounts.

He added: "The government also recognises the vital role played in the community by the local post office, which is why we have put in �2bn of support for the network over the last eight years."