Scottish subpostmasters will be offered grants of up to £25,000 to help diversify their business. The Scottish government has set aside a £1m Challenge Fund for those who believe that they can offer their community something different through their branch.

National Federation of SubPostmasters general secretary George Thomson welcomed the move. "This is a positive step in supporting post offices across Scotland," he said. "The Fund recognises that for rural and urban alike, post offices are vitally important."

Scottish Enterprise Minister Jim Mather urged any subpostmasters with new ideas to apply. He commented: "We want to see applications from those post offices focused on diversifying their business. Our priority is to direct funding to help subpostmasters develop their enterprise, identifying opportunities for new revenue streams."

Applications will be available from July 23.

Meanwhile, Business Secretary Vince Cable has pledged that the government will "protect" the £180m of funding for the Post Office network announced by the previous government.