Camelot is facing opposition to its plans to run bill payments and phone top-ups through National Lottery terminals.

Payment terminal provider PayPoint has written to subpostmasters claiming that the proposed service which could see Camelot entering into new commercial partnerships with a number of organisations including the Post Office and the Co-operative Bank will disadvantage the 7,500 or so post offices without a lottery terminal.

The Post Office has written to the National Lottery Commission (NLC) to clarify that only "exploratory" talks between itself and Camelot have taken place about the new operation, while the National Federation of Subpostmasters confirmed that it was monitoring the situation but was confident of a "beneficial solution".

In a further twist, the NLC has extended the date of the consultation until April 26 because Camelot has amended some details relating to costs and revenues. PayPoint and other payment terminal companies are expected to request the NLC to reject the proposal on the grounds of EU competition law.