The government has decided against implementing a Post Bank scheme due to cost constraints.

Speaking at the launch of the future of the Post Office policy, Minister for Postal Affairs Ed Davy said that the time was not right time to create a state-backed Post Office bank.

"Setting up and capitalising a new bank would be time- consuming and expensive. Funding is better spent modernising and maintaining the network," he said.

The decision to cancel the scheme was criticised by trade groups including the Federation of Small Business and the Communication Workers' Union, who claim that it would have brought in lucrative business.

The government did, however, announce an agreement to allow RBS customers access to their accounts through the network. According to the Minister, this would enable more than 80% of current accounts to be accessed through post offices.

It also announced several pilot schemes that would allow post offices to offer government services including 'print on demand' forms for the public, and is exploring plans to make it possible for post offices to accept Pension Service and National Insurance number applications.

National Federation of SubPostmasters general secretary George Thomson welcomed the addition of government services. "They have the potential to allow the public to deal face-to-face with the state in a trusted local environment, as well as delivering vital new revenue streams for our post offices," he said.

Property agent Christie & Co has reported a 20% increase in the number of post office businesses it has sold in the year to date.